Frequently Asked Questions

Frequently Asked Questions

Basics

Do I need a financial advisor?
A financial advisor is there to help you invest and manage your hard-earned money for whatever future goals you might have. Just like many other professionals, financial advisors’ style, results and costs may vary significantly. If you have a legal problem, you would probably want to hire a lawyer, unless you have a high degree of legal expertise. If you have a medical problem, you would probably want to see a doctor unless you are a doctor yourself. If you want to remodel your bathroom, you would probably hire a contractor, unless you have the expertise and the time to do it yourself. So unless you are very comfortable with markets and investing, and have the time and patience to manage your funds, it is a good idea to hire a professional.
Why should I use Passed Pawn Advisors?
Passed Pawn Advisors utilizes the latest methodology and technology to create sensible and affordable financial solutions for our clients. We automatically allocate and manage your low-cost investment portfolio based on your risk profile. It may sound similar to the so-called robo-advisors, but we do not believe that one size fits all.

Many institutional investment managers would cost more, yet may be unable to fully customize your portfolio for various reasons. They may be constrained by a prospectus of their fund, being part of a larger institution may limit risk by imposing institutional mandates on portfolio allocations, and finally, their career and compensation may prevent them from taking the appropriate risk.

What sets us apart is the ability to provide you with a highly customizable combination of thematic and impact portfolios designed around your values and ideas, while keeping your fees low.

What types of services do you provide?
We offer investment management services. That includes creating and maintaining investment portfolios across multiple account types, as well as some additional services such as tax harvesting and optimization.

Please note that we do not provide the following services:

  • Tax advice. While we take tax issues into consideration for portfolio construction and optimization, and offer tax harvesting tools, please contact your accountant for tax-related advice.
  • Estate Planning. While we can help with the investment aspects of estate management, please contact your attorney for estate planning services.
  • Real Estate transactions. We do not advise or execute individual real estate transactions. Please contact your licensed real estate agent.
  • Brokerage Services. We are not a broker/dealer, but we work with several to execute transactions in your portfolio.
  • Deposits, loans, credit cards. We do not have a banking license.

Please contact us if you have further questions.

What types of accounts do you manage?
What is the investment minimum to open an account?
There is no minimum to invest, but there is a minimum annual fee. Please make sure to check out our Brokers & Fees page. Also, please bear in mind that each broker may have their own account minimum.
Does it matter where I live?
We’re serving all 50 states and US territories, but you have to be a US citizen or permanent resident.
I work in the financial industry. Is that a problem?
If you or any member of your household is affiliated with or employed by a member of a stock exchange or the Financial Industry Regulatory Authority (FINRA), you may be required to have that Associated Person fill out a Rule 407 letter from their employer, which would allow you to open and maintain accounts at other member-firms by sending duplicate statements and confirmations.

Please contact the Member Firm’s Compliance Department and if required, a compliance officer should fill out a Rule 407 letter and it should be submitted directly to your broker or to Passed Pawn Advisors by email at Compliance@PassedPawnAdvisors.com.

Please note that unlike brokerage accounts, advisor accounts typically do not have to be held only at the brokers pre-approved by the Member Firm.

Do you have a mobile app?
Absolutely. Download your free Apple or Android app here:
 
What are registration benefits?
By registering you gain access to these benefits:
  • Additional news feeds
  • Additional sample portfolios and investment ideas
  • Live online chat
Registration is free and we respect your privacy. See our Privacy Policy for full details.

Accounts

Why do you have different pricing levels?
We offer three simple plans: the Starter, a basic fully digital option; the Impact, which includes semi-annual call with an advisor, and the Power Plan, a full-featured advisor account. More information on features and pricing is available on our Brokers & Fees page.
How do I get started?
To setup your account, follow these simple steps:

  1. Register and fill out your profile
  2. Open and fund an account through our broker, Motif Investing. For Power Plan clients, a setup at another broker may also be required.
I already have a broker. Can I keep my account?
This information is available on our Brokers & Fees page.
I don’t have a brokerage account. How would I choose a broker?
This information is available on our Brokers & Fees page.
What are my account fees? Are there any hidden fees?
This information is available on our Brokers & Fees page.
Who is Motif Investing and why should I use them?
Motif Investing is a new generation broker that allows clients to build a custom portfolio of up to 30 stocks or exchange-traded securities and trade that “motif” in a single transaction for a single low commission. Their advisor services allow us to create custom client portfolios at significantly lower cost than through traditional brokers. We recommend using Motif as a complimentary, tactical portfolio, or consider using it exclusively for smaller investment portfolios. Please take a look at some of the motifs we have built.
Why can't I just use Motif Investing services directly?
You absolutely can. You can build your own portfolio and even find many of our publicly available motifs. However, our core portfolios are not public, and neither are many of our premium portfolios. You also won’t be able to take advantage of our automated rebalancing, portfolio allocation, and ongoing portfolio management.
Is my money and personal data safe?
Absolutely. We actually never handle your money, bank accounts or credit cards. The custody of your investments and cash balances stays with the brokers at all times. The brokers provide bank-level encryption to guard your financial and personal information, and your money is covered by both SIPC and external insurance. See Motif Investing and Interactive Brokers for more information.

Our fees are deducted by the brokers directly from your investment accounts. All confidential client information that we retain is likewise encrypted and never stays on our website.

How will I be charged?
Your account fees will be automatically taken out of your brokerage account quarterly. There is no need to provide us with your bank account or credit card numbers.
Who will send me tax documents?
Tax reporting is the responsibility of the brokerage. All of the tax documents will come from them.
How do I change my password?
You can change your password from the My Account page.

Investing

How does the asset allocation process work?
Your answers to our questionnaire allow us to assess your risk tolerance and time horizon, which determine your core portfolio allocation. It will be made up of low-cost, highly liquid, pre-screened ETFs. You can always update your asset allocation by changing your answers.
What are satellite investments?
Satellite, or non-core, investments are typically smaller portions of the portfolio designed to provide a different type of risk exposure based on your own ideas. We do not believe in a cookie-cutter approach to all portfolios. Providing you an opportunity to add an investment into what you value or believe in is our way to make your portfolio uniquely yours, while still maintaining the core that you need.
What are hybrid investments?
Technology today allows us to simplify and automate many tasks. One of them is our proprietary algorithm for portfolio allocation. Some things, however, are best left to humans. Designing and maintaining thematic and impact portfolios is one of them. Designing specialized investment solutions and addressing individual needs is another. One size doesn’t fit all. Automatically allocated, expertly managed – that’s the hybrid investment approach we believe is the future of this business.
What is thematic investing?
Thematic investing is a technique of recognizing a trend – due to economic, demographic, geopolitical, regulatory or technological factors – and identifying the investment opportunities that would benefit from that trend. It has long been a staple in institutional portfolios, but it traditionally required dedicated research teams and active management, making it prohibitively expensive to individual investors. At Passed Pawn Advisors, we create and manage a diverse group of thematic portfolios.
What is impact investing?
Impact investing is associated with positive social and environmental change in addition to financial returns. While it has not always been profitable, impact investing now allows for a number of investment opportunities that can reasonably be expected to generate positive returns in addition to doing good. At Passed Pawn Advisors, we create and manage a diverse group of portfolios designed for impact investing.
What if I don’t see my theme or the right impact investing?
We maintain over 300 custom portfolios, and we’re always adding more. If you don’t see your choice, just ask.
For the Power plan, what types of investments will you recommend?
Investments in the Starter and Impact plans will be managed exclusively using ETFs and customized equity Motif portfolios, as described above.

Although we are not limited in the investment instruments we can choose for our clients in the Power plan, there are some that we believe provide our clients with the types of risk/reward characteristics and cost we can recommend. Then there are others that we feel do not fit this category.

Investments we may recommend

  • Mutual funds without front load
  • Equity and fixed-income ETFs
  • Equity and fixed-income CEFs
  • Custom equity portfolios1
  • Alternative investments, including REITs, MLPs, BDCs

Investments we won’t recommend

  • Front-load mutual funds
  • “Penny” stocks or other illiquid instruments
  • Leveraged ETFs
  • Forwards and other OTC derivatives
  • Art, wine, classic cars, coins, stamps or other collectibles
  • Venture capital, angel investing, or private equity
  • Any investment we did not research
1 While we typically do not recommend individual stocks due to higher investment risks, we offer custom-built equity portfolios for our clients if we are unable to recommend a comparable exchange-traded product.
Will I know what I’m investing in?
Absolutely. More and more investors care about what they invest into, and we’re happy to provide you with completely transparent account statements, and answer your questions.
Can I limit or increase my exposure to any specific type of investment?
We will take your values and requests into consideration, and will do our best to accommodate. Any specific industry, region or security can usually be added or avoided if desired.
Do you act in my best financial interest?
We act as a fiduciary on your behalf and fully abide by the Fiduciary Standard. Being an independent advisor allows us the freedom to do so without the internal conflicts of a large broker-dealer. We don’t make any money on your trade commissions, on interest on your cash balances, or by charging you for margin loans. Our broker partners are chosen specifically for their features and low transaction costs. We are not affiliated with any investment companies, so we are not compensated by any fund we recommend. If we had any conflict of interest, we would disclose it to you. Our recommendations are based on independent, unbiased research, and we only charge for our advice.
How often will you rebalance my portfolio?
The purpose of portfolio rebalance is to realign the weights of allocations in your portfolio to what was originally intended. In other words, we would be selling some of the winners and buying some of the losers, in order readjust risk exposure. While it’s a good practice, doing it too often may incur additional transaction costs and unnecessary tax consequences, and doing it too seldom may leave your portfolio with undesired risk. We typically would rebalance your portfolio semi-annually, unless a different arrangement was agreed upon or a rebalance was required to a particular custom portfolio. This rebalance is absolutely free, except for applicable broker transaction costs.
What happens to dividends?
Dividends will be deposited to your account as cash. We will not reinvest small amounts in order to avoid unnecessary transaction costs. The exception is mutual funds in the Power plan, where reinvesting into the fund is free of commissions and will be always be done by default.
What is my investment risk?
It’s important to keep in mind that every investment has risks. They vary in types and degrees, but risk includes the possibility of losing some or all of the original investment. Past performance does not guarantee future results. Our job is to provide you with the most potential upside within the limits of your risk tolerance.
Can I use margin accounts?
Retirement accounts excluded, typical brokerage accounts can have margins. Margin account can provide leverage, but would increase investing costs and could also present significant additional risks. We generally discourage the use of these forms of loans, but would consider it for interested clients with aggressive risk profiles.

Misc

What does the name of your company mean?
In chess, a passed pawn has a clear path to becoming a queen. It provides an uncommon upside and often becomes a game changer.
What do I do if I have a problem or a question?
The best way to reach us is to use the Contact Us page. It provides details on reaching us via online form, email, phone, and live chat (for registered users).
Can I talk to a financial advisor?
Different people have different needs in terms of advisor communications. This is why we provide different levels of accounts. If you prefer to have a semi-annual call with our advisors to discuss your performance, goals and have all your questions answered, please choose the Impact plan. For unlimited access to an advisor, consider the Power plan. If you choose the Starter plan, you can still get help with your account through the Contact Us page, but any answers regarding your investments may be limited. You should find most of the answers right here, in the FAQs. You’re also welcome to upgrade your account at any time.
Why do you donate to charity?
We believe in socially responsible investing (SRI). And we’re willing to put our money where our mouths are. We will annually contribute 2% of our fees to the charity of your choice. You can designate a specific charity from the list on your profile.
Can I choose my own charity?
The charities we selected are the top ones in each of the five major categories based on unbiased, independent research. While we may extend the list in the future, these are currently the only charity choices available.
Do you sell my personal information?
We don’t sell your personal information. We’re here to help you with your investment needs and consider keeping your trust a top priority.
Can you help me learn more about markets and investing?
We would love to! A big part of our mission is investor education. We provide a number of resources on our website and through social media:
  • Our Investing News page provides curated Twitter news feeds for topics ranging from markets news, to specific investing topics, to emerging technologies (aka Passed Pawns!), to Personal Finance such as retirement, banking, and real estate
  • Our Newspapers provides links to daily generated thematic investing papers. You can subscribe and get the papers you’re interested in delivered straight to your mailbox daily!
  • Our Market Data page provides real-time market data including major indices, asset classes, ETFs, and a large number of stocks organized by sectors and sub-sectors
  • More Investor Resources include videos of our recent investing webinars, which you can also follow on our YouTube channel, and links with more useful investing information
  • Our LinkedIn page posts covers general investing news and information
  • Our Facebook page provides multiple daily posts focusing on markets news, emerging technologies, and personal finance
  • Our Twitter feed includes startup news and specific company news and analysis, in addition to what Facebook covers
  • Our Pinterest account gives you the visual information across five boards: Investing News, Investor Education, Passed Pawns (Emerging Technologies), Startups and (Life of) Millennials
  • Finally, our articles on Seeking Alpha provide in-depth analysis on various investing topics

More investor resources are in development including a comprehensive ETF Education Center. If you would like to see any other particular subject covered, please let us know.

How do I give you feedback?
Please use the online form on the Contact Us page to provide your feedback.