Frequently Asked Questions
▸ What is Macroclimate’s relationship to Dimensional Fund Advisors?▸ What is Macroclimate’s relationship to Dimensional Fund Advisors?
Dimensional Fund Advisors (DFA) offers its funds to individual investors through a select group of investment advisors. Macroclimate® is not affiliated with DFA, and doesn’t receive commissions or financial incentives of any kind for recommending DFA funds. We do so because: 1) our investment beliefs are well aligned with DFA; and 2) DFA funds offer a way to attain broadly diversified low-carbon portfolios at low cost.
Mark Kriss, Macroclimate’s Managing Partner, serves as a non-paid member of the Dimensional Sustainability Funds Council. The Sustainability Funds Council is a group of consultants and wealth managers not affiliated with Dimensional working together with Dimensional to research the best ways to provide sustainability investment solutions to investors.
▸ Which account types do you support?▸ Which account types do you support?
We support individual, joint, and trust accounts along with all types of IRAs. Have an old 401(k)? We can help roll it over into a Low Carbon IRA.
We also support endowment accounts for non-profit organizations such as professional associations, foundations, museums, environmental organizations, educational institutions, and religious institutions and organizations. Simply type “nonprofit organization“ under “Special Instructions” when you confirm your plan selection.
We do not currently support 401(k) or 529 plans.
▸ What do I get with a Macroclimate® account?▸ What do I get with a Macroclimate® account?
In a nutshell, you get an efficient, well-balanced low-carbon portfolio using low-cost, institutional-grade mutual funds from Dimensional Fund Advisors. After getting you into the right mix of investments, our software monitors your portfolio regularly and will automatically rebalance when necessary. You also gain access to MoneyGuidePro, a professional-grade financial planning tool that you can use on your own or in collaboration with your financial planner, and state-of-the-art on-demand performance reports through the Macroclimate® Client Portal.
▸ Do you take my taxes into consideration?▸ Do you take my taxes into consideration?
When you sign up for a taxable Macroclimate® account, we’d be pleased to conduct an initial analysis of your existing holdings – at no additional charge – to make sure that we’re being tax efficient with your strategy. Simply “request cost basis analysis” under “Special Instructions” when you confirm your plan selection.
Since we don’t trade often once your new portfolio has been established, realizing significant capital gains should be infrequent in most cases. One of our management objectives is tax efficiency — our fund selection criteria values after-tax returns over pre-tax returns. We prefer long-term gains over short-term gains to keep taxes as low as possible. If for tax reasons you’re not prepared for us to sell a security, you can keep it out of your account by notifying us when opening your account.
We recommend speaking with a tax professional to discuss your specific situation.
▸ Where is my money held?▸ Where is my money held?
Macroclimate® has partnered with one of the most trusted and popular brokerages in the country: TD Ameritrade Institutional. This means if your money is already there, your Macroclimate® account will stay there. TD Ameritrade is a member of the Securities Investor Protection Corporation (SIPC). Securities in your account are protected up to $500,000. Details.
If your account is at a different brokerage, we’ll open a Macroclimate® account for you at TD Ameritrade. We chose TD Ameritrade because they have a great selection of funds, state-of-the-art technology, excellent investor support, and low cost.
▸ How does my existing account become a Macroclimate® account? ▸ How does my existing account become a Macroclimate® account?
If your account is already at TD Ameritrade Institutional, Macroclimate® will be added as an advisor and we’ll manage your account at TD Ameritrade. If your account is at another brokerage, we’ll move your account to TD Ameritrade and manage it from there.
Once you get started, our first step is to reinvest your current holdings to create an efficient, well-balanced portfolio for you using low-cost, institutional-grade mutual funds from Dimensional Fund Advisors. After getting you into the right mix of investments, we’ll monitor your portfolio and automatically rebalance quarterly.
▸ How do I add money to my Macroclimate® account?▸ How do I add money to my Macroclimate® account?
For non-retirement accounts, simply mail your check payable to TD Ameritrade Clearing Inc. to:
TD Ameritrade Institutional
PO Box 650567
Dallas, TX 75265-0567
Always include your account number in the memo section of your check. Certified mail with tracking is recommended. For retirement accounts, please also complete IRA Deposit Slip.
MOBILE APP CHECK SCANNER
If you prefer, deposit your check using TD Ameritrade’s Advisor Client mobile app (visit Apple®AppStore or Google Play). Refer to screenshot below.
If you don’t already have Advisor Client login credentials, please contact Client Services.
ELECTRONIC (ACH) TRANSFER VIA WEB
You can easily add money to accounts via electronic (ACH) transfer from your bank on the TD Ameritrade Advisor Client website as shown below. This is the best approach if you plan to make regular deposits.
Please note: account titles/regisitration must be exactly the same for ACH transfers to work. For example, you can’t ACH transfer funds from a non-trust checking account to a trust account or IRA account. Use check or wire transfer instead. If you don’t already have Advisor Client login credentials, please contact Client Services.
Complete, print, sign and mail Wire Transfer Form to:
TD Ameritrade Institutional
PO Box 650567
Dallas, TX 75265-0567
OR FAX: (866) 226-4614
Be sure to include your account number and correct account title/registration.
▸ How do I withdraw money?▸ How do I withdraw money?
For taxable accounts, you can easily withdraw money at any time by writing a check or via electronic (ACH) transfer to your bank using the TD Ameritrade Advisor Client website as shown below.
When you need to withdraw funds, we rebalance to your target allocation following your cash withdrawal. We recommend that you alert our Client Services team 48 hours prior to large cash withdrawals to ensure availability of your funds.
To minimize transaction costs, we also recommend that you use a bank checking account — not your money market account on TD Ameritrade — for your day-to-day expenses.
▸ What do you mean by a well-balanced portfolio?▸ What do you mean by a well-balanced portfolio?
Whether you’re comfortable with a lot of risk or lean towards more safety, a properly diversified portfolio will help reduce your risk compared to a non-diversified one. A portfolio that’s filled with a combination of stock and bond mutual funds of various degrees of risk means it’ll be better prepared for any number of situations the market throws at it.
In short, a well-balanced portfolio offers you a higher expected return at your preferred level of risk.
▸ What do you invest in?▸ What do you invest in?
Our primary goal is to build a properly diversified portfolio for you at the lowest cost using asset class mutual funds.
To do this, we identified seven key asset classes that have the biggest impact on investment returns and let us diversify your portfolio on two levels: security-level diversification by investing in asset class mutual funds and market diversification by providing exposure to many different markets across asset classes.
We invest you in institutional-grade mutual funds from Dimensional. These funds are broadly diversified within each asset class we focus on: US-based stocks, developed (non-US) and emerging market stocks, real estate, government bonds (US and non-US), and real return (inflation-protected) bonds. See also “Which funds do you use?”. You can learn more about Dimensional and how we invest here.
▸ Is there a non Low Carbon option?▸ Is there a non Low Carbon option?
We believe a low carbon/sustainability strategy is both the prudent and responsible default option for everyday investors. However, if you prefer, you may choose an “unfiltered” approach which does not exclude or underweight companies based on carbon-intensity or other sustainability factors. To do so, select “Maximize Expected Returns” and specify “Unfiltered” under “Special Instructions” when you confirm your plan selection.
▸ What happens to the stocks and funds I already own?▸ What happens to the stocks and funds I already own?
Our goal is simple — to provide you with a low-cost, well-balanced and environmentally responsible portfolio operating at the risk level you choose. Typically, everyday investors are often paying too much in fees and/or own a portfolio that’s not well-diversified (translation: taking on far too much or too little risk). To provide you with an efficient portfolio geared towards long-term growth, we will sell your current holdings and replace them with low-cost, well-diversified institutional-grade funds.
If you have existing holdings in a taxable account, we’d be pleased to conduct an initial analysis of your portfolio – at no additional charge – to make sure that we’re being tax efficient with the rollout of your strategy. If your transferred assets hold substantial unrealized gains, the report will include at least two rollout options for you to choose from. Simply “request cost basis analysis” under “Special Instructions” when you confirm your plan selection. (Please allow three weeks following receipt of your assets at TD Ameritrade Institutional.) An illustrative example is shown below.
Note: Capital gains taxes are only triggered when an asset (like stocks or mutual fund shares) are “realized” (sold) for a price that is higher than the purchase price — not while it is held by an investor. Our free cost basis analysis described above may be advisable if you think you have holdings with substantial unrealized gains in a taxable account. Since capital gains in tax-deferred accounts like IRAs or 401Ks accumulate tax free until the investor takes constructive receipt of the gains (i.e. withdraws cash from the account), they are not subject to these capital gains tax considerations when restructuring investment portfolios. Please consult your tax advisor regarding your personal tax situation.
▸ How often do you rebalance?▸ How often do you rebalance?
We rebalance quarterly – and, as needed, when you add or withdraw cash from your account.
As you add cash to a portfolio, we buy more mutual funds to maintain your target allocation. To keep transaction costs low, we won’t buy a small amount of a security if it results in unnecessary transaction fees. When you need to withdraw funds, we rebalance to your target allocation following your cash withdrawal.
▸ How do you measure investment risk?▸ How do you measure investment risk?
Investment risk is the risk that your investments could go down in value.
We measure risk by looking at how stable investment returns have been in the past. For example, an investment of $100 whose value fluctuated between $90 and $110 over the course of the year is riskier than an investment whose value fluctuated between $95 and $105. More importantly, we also look at how different assets move at the same time — that’s how diversification lowers the riskiness of your portfolio.
Security & Privacy
▸ Is my money safe?▸ Is my money safe?
All Low Carbon Accounts come with Securities Investor Protection Corporation (SIPC) coverage, which protects securities and cash of the customers of its members up to a maximum of $500,000, of which $250,000 may be cash. For additional information about SIPC coverage, including a brochure, please call (202) 371-8300 or visit www.sipc.org.