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SearchBeginners Summary for FolioFN8
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ameichtry    |  0 | |
| Hi Everyone, just wanted to post a quick one page introduction for someone who has never heard of FolioFN. The advisor registers at folioadvisors.com and sets up one or more model portfolios.(which do not use any actual money. One can set up several funds if desired. The client sets up an account at folioclient.com with no minimum account size. The advisor updates his model portfolio , and uses "sync" so that all the client portfolios will mimic the model portfolio. Foilo makes all the brokerage trades twice a day using their system called window trading. Clients may own partial shares such as 453.72 shares of CSCO, and their percentages of each stock mirrors the model portfolio. The client is charged a fee which some is sent to the advisor, and some to Folio. Either monthly or quarterly in arrears or upfront. Fees the customer pays to Folio for each account are $250 a year commissions plus a percentage of assets such as 0.4% annually for 0-$250,000, 0.3% for 250-500k, 0.2% for 500k+. There are also another commission structure to choose from, and they may change these rates of course. Folio does all the recordkeeping, and supposedly CPA's love the FolioAdvisor statements. It was founded in 1999 by a former commissioner of the SEC, looks very reputable, and insured by SIPC and others. Interactive Brokers (a very good broker)also has a program that can be used for spoke funds, but I did not look into it. |
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Post 1 • IP
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calesmith | 0 |
| Thanks, Andrew. Solid observations. I'd add that the fee structure described above depends on the investor, firm and/or portfolio manager, though. Folio, like Schwab, Scottrade and other discount online brokerages, has two parts to its business - a part serving retail investors, and another focused on institutions. That $250 a year fee is what a retail investor would pay Folio to invest on their own...equivalent to pre-paying your commissions upfront and then trading as much as you want that year. On Folio Institutional, however, you're only charged commissions if you trade outside of the windows you mentioned - and those cost $4 a pop. Otherwise, yes, Folio gets paid based on just a percentage of assets - like all the RIAs that Folio Institutional serves. And the actual bips (or basis point) fees they'll charge spoke fund managers and their investors depends on a handful of criteria they use to evaluate you when you're accepted onto the platform. My fees are lower than what you captured above, for instance. Other spoke fund managers do get quoted similar bips, though...another lengthy subject I will need to cover in more detail. Folio Institutional is a little shy about revealing what goes into those fee calculations they charge advisors. I attempted this summer to pre-negotiate a standard set of bips and breakpoints that Folio would offer to all spoke fund managers, but no dice. Haven't given up yet, though. In fact, I suppose that's one of my motivations in starting spokefunds.com - once there is a critical mass of spoke fund guys out there, I'd like to think that we'll all collectively have a little more leverage on pricing. And on Interactive Brokers...great point in that they are certainly other firms that you could theoretically run a spoke fund on. I'm just convinced that Folio is the best one, for a variety of reasons I'll also try to spell out. I'm actually in the process of putting together a matrix for my ebook that will compare and contrast Folio with IB and a handful of other back-end firms, too. - Cale |
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| Post 2 • IP
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itconsultant | 0 |
| Hi, When i called Foliofn, they said they charge $200 a year to the clients. They said they don't charge any AUM to advisors or clients. Weird. Sounds like they charge AUM fees to clients plus a certain minimum $amount. IB charges a min of $10 a month whether you trade or not. Also, I dont know of a way to build a model using IB. Plus the Advisor creates a master account which will also be charged $10 a month if the total trades of all clients accounts does not equal or exceed $10 * (number of client accounts + 1.) |
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| Post 3 • IP
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