1.General Questions

Alpha Architect Advisor, managed by Alpha Architect, is an automated advisor that brings affordable, evidence-based, downside protected, active solutions to retail clients. Our custom solutions designed for high net worth individuals are now available to everyone. Learn about why we launched a robo advisor.
We believe in empowering investors through education. Traditional firms aim to make investing opaque and difficult, which leads to stickier advisory relationships. We seek to educate investors so they can make informed decisions that help them achieve their financial goals. We believe in affordable, transparent solutions that give investors a chance at earning strong returns, while maintaining some level of downside protection.
We started our journey in academic research where we developed and studied invesment concepts related to value investing, momentum investing, and trend-following. While we found compelling evidence that one can develop unique investment opportunities, we quickly learned that the marketplace didn't care about the evidence, they cared about minimizing their career risk at the expense of their investor's long-term financial well-being. Excess fees and misaligned incentives erode promising opportunities to generate returns.

A company was born: Alpha Architect built a transparent and affordable active investment platform by leveraging a low-cost business model that avoided expensive sales and distribution channels, and instead, found clients by providing free education and tools as opposed to expensive marketing materials and gimmicks. Read more about the distribution problem of big firms.
We are not your typical asset manager (and we never want to be). Our team is composed of premier finance PhDs, combat Marines, entrepreneurial finance quants with a passion for trading, and computer programmers that believe technology can revolutionize Wall Street for the better.
We provide affordable active management in a disciplined, systematic way. We are not passive investors. We have a pesky belief in evidence-based solutions and the evidence is pretty clear that for longer horizon investors, actively managed strategies can be effective. We are different because we are comfortable taking short-term career risk to pursue long-term performance. Learn more about the case for systematic decision-making.
We partner with long-term investors (5 years+) that seek affordable, fully transparent retirement solutions. If you follow the markets on a daily basis, constantly check your account balance, or try to gain an "edge" by timing the latest trends or investing in the newest fad, we probably aren't for you.

We provide automated investment advice for accounts starting at $100k (Alpha Architect Advisor automated service). For high net worth clients, we provide customized solutions for $1M+. RSVP for Alpha Architect Advisor

2. Investment Strategies

We provide "Robust Asset Allocation" strategies that seek to deliver a low-cost, low-complexity, retirement portfolio with optional downside protection. Our approach parallels our research on robust asset allocation.
The traditional definition of active investing is any approach that does not hold the global basket of all risky assets in proportion to their market weights. By this definition, every investor is an active investor -- the biggest difference is related to just how "active" an investor decides to be. We are certainly more active than most because we seek to leverage our research for our client's long-term benefit. We are also firm believers that passively managed approaches, while appropriate in many cases, are not a panacea (click for link to WSJ post) .
Our downside protection is a signal-based system designed to avoid steep drawdowns in the market. We use technical market factors that look at absolute and trending performance metrics. Based on these metrics, three possible outcomes occur:

1) Stay in the market (100% exposed)
2) Sell to 50% exposure (go to cash)
3) Sell 100% exposure

These signals are applied to each asset class, so your exposures can vary. For example, you could be 100% invested in US equities, 50% exposed to internatlonal equities, and fully "out" of commodities until the signals change. We dynamically assess each asset class to determine when to be "in" and when to be "out"

Downside protection will not shield you from all market losses. However, we have analyzed hundreds of market indicators, and the empirical evidence we can find best supports this method. For long, prolonged downturns, we believe this system can minimize volatility and shield portfolios from most sharp (e.g., 25% or more) drawdowns.

Our investors have the freedom to choose. You can design a portfolio with or without downside protection at no additional cost.
Learn more about downside protection
No. Perfect market timing is impossible. In general, if you invest in risky assets such as stocks, one needs to be prepared to potentially lose money. However, we deploy systems that seek to avoid prolonged downturns by exiting asset classes when certain rules are triggered. The historical evidence suggests that these models can be effective; however, past performance is not a guarantee of future results.
We exclusively deploy tax-efficient vehicles (e.g., Exchange-Traded-Funds) in our investment algorithms, so at a basic level, our strategies are relatively tax-efficient, especially when compared against mutual funds. However, more sophisticated tax-management requires a $1M minimum account.

There are advanced techniques where an investor can have both risk management and tax management benefits. These services are beyond the scope of our automated advisory offering and require a $1M investment. Please contact us if you would like to learn more about this offering.

Unlike other robo-advisors that only provide tax management, we provide downside protection. Unfortunately, downside protection makes tax management challenging. For example, we may own a low-basis position that needs to be sold according to a market signal. With downside protection, we sell the low-basis position to avoid the drawdown. This can generate a gain, but if you are invested in a nontaxable account or have tax losses elsewhere, the tax consequences are irrelevant.

For every day investors, we believe downside protection (e.g., attempting to avoid sharp, prolonged downturns in the market) plus tax efficient ETFs outweigh the benefits of standalone tax management considerations.

Our investors have the freedom to choose. You can design a portfolio with or without downside protection at no additional cost.
It depends. If you open a non-taxable retirement account, you don't have to worry about tax consequences. If you open a taxable account with our automated advisor and select downside protection, the risk protection system can generate tax consequences. We have found; however, that most people are more concerned with significant drawdowns and can manage tax gains / losses independently.

You have the freedom to choose. If you desire downside protection, you can tailor your portfolio accordingly. If you prefer a "buy and hold" strategy, you can opt-out of downside protection.

For high net worth accounts ($1M), we can provide both tax management and downside protection.
Downside protection is ideal for investors that are more concerned about steep drawdowns versus tax consequences of getting into / out of positions. This investor is typically someone with shorter time horizons, less aggressive investing style, and indifference to tax consequences (e.g., the funds are in a non-taxable retirement account).

Downside protection may not be desired if you are highly tax sensitive, are indifferent to volatility, and have longer time horizons. This investor is typically someone that is "buy and hold forever", in a high tax bracket, and invested in a taxable account (e.g., non-retirement).

For high net worth accounts ($1M), we can provide both tax management and downside protection.
All accounts receive our sophisticated tactical asset allocation algorithm. Within our asset allocation framework you may opt for downside protection as well as tailor your risk tolerance based on age, assets, etc.
  • Domestic Equity
    • High-conviction value-based ETFs (Managed by Alpha Architect)
    • High-conviction momentum-based ETFs (Managed by Alpha Architect)
  • International Equity
    • High-conviction value-based ETFs (Managed by Alpha Architect)
    • High-conviction momentum-based ETFs (Managed by Alpha Architect)
  • Real Estate (Passive REIT ETFs)
  • Commodities (ETFs ranking commodities on backwardation and momentum)
  • Fixed Income (ETFs investing in 7-10 year U.S. Treasuries)
One of our core beliefs is in evidence-based investing. The academic evidence shows that value and momentum investing styles have generated higher returns, historically. So, we encourage investors with a long investment horizon to consider active strategies.

Of course, some investors believe it is impossible to beat the market after accounting for additional trading fees and higher expense ratios. Our firm keeps our fees and trading costs low to counter this view. Click here to read about our views on active versus passive.
Unlike many investment advisors, who outsource the research function so they can focus on sales, we focus on the research function. We manage your portfolio directly and do all of our own research and development. Our team of PhD researchers has developed the strategies, which is then implemented by our trading and execution team. We eat our own cooking and invest the vast majority of our liquid net worth into our own products and strategies. We also have a dedicated operations team to support compliance requirements. Meet our team here.

3. How do I set up an account and what do you do with my funds?

To enroll in Alpha Architect Advisor, you must be 18 years old or more, and have a valid Social Security Number or Tax Identification Number. If you are located outside United States, more documents may be required (e.g., passport ID, proof of residency, foreign bank information, etc.).
Yes. You will provide additional information during the account opening process.
Alpha Architect Advisor currently supports individual, joint and trust accounts. We also support Traditional IRAs, Roth IRAs and Simplified Employee Pension (SEP) IRAs, IRA transfers, and 401(k) rollovers.
For high net-worth strategies, the minimum investment is $1M. Contact us to learn more.
Your assets are held in a brokerage account in your name at Interactive Brokers (IB), the broker-dealer we have chosen. We can never, and will never, have access to your funds beyond deducting our monthly management fee. Interactive Brokers is rated the Best Online Broker for the fourth consecutive year by Barron’s 2015. Interactive Brokers is also the largest U.S. online brokerage firm by number of daily average revenue trades. We don’t receive any kickbacks or fees from Interactive Brokers. We simply believe they are the best, lowest cost provider for our clients.
You can use the Alpha Architect Advisor portal for all of your portfolio needs. Our portal is designed to provide streamlined reporting, simple access, and a more client friendly experience. Only a select number of requests (e.g., updating banking information) is done directly through Interactive Brokers for security purposes.
Alpha Architect Advisor’s service is only available with accounts opened at Interactive Brokers (IB). Other brokers charge flat fees per trade, which is extremely expensive for small accounts. We believe that these fees need to go the way of the dinosaur. Interactive Brokers will also never sell their order flow to "dark pools" for high frequency trading firms to exploit.

We realize it may be inconvenient to set up a new account with a new broker, but the savings will be much better for investors in the long run.
You have two options. Option 1 is to sign over designated trading authority from you to us. This will then make your IB account an Alpha Architect Advisor managed account. You have access to your account at all times, but we will do the trading (besides, that is what you are paying for).

Your other option is to just create a new account and have it show up alongside your existing account.
Yes. You will answer a few questions in our application portal and receive instructions to complete your transfer. It normally takes 5-10 business days to fund a new account with and an existing IRA.
Yes. Kindly follow the instructions in the application portal. You will have to complete some additional steps to facilitate a transfer.
Yes. Kindly follow the instructions in the application portal.
No. Interactive Brokers will reject any account transfer that contains securities which IB does not trade in. If the transfer fails, IB will inform you as to why. You will then have to sell those positions before attempting another transfer. We strongly recommend selling bonds, penny stocks, annuities, options, mutual funds and other unique investments prior to initiating a transfer to fund an account.
For retirement accounts, transitioning your portfolio into Alpha Architect Advisor does not generate tax consequences, ever. For taxable accounts, you are responsible for any taxes incurred (if any) when we sell your positions to transition into an Alpha Architect Advisor portfolio.

If your old account owns ETFs that we would invest in, we will simply “plug�? these ETFs into your portfolio and you would not incur a tax liability.
Absolutely. Your account and personal information is encrypted with 512 SSL encryption and stored across different servers in secure facilities. We only retain the information required by law and nothing more. We never sell your information, ever.
We only use your information in two ways: to comply with government regulations and provide the optimal financial portfolio to grow your wealth. We never share your information with any third parties.
Yes. If at any time you’d like to close your account and withdraw the proceeds, please contact us here: [email protected]. It usually takes 5 business days to close the account. We will first liquidate or transfer your positions, convert foreign currencies (if you are foreign customers), verify bank wire instructions and so on.

4. How do I fund my account?

You can fund your account via wire, ACH transfer, or account transfer from the following account types: traditional brokerage accounts, IRA accounts, 401k / 403b rollovers.

Processing times vary, and for rollovers, you will need to submit paperwork to your plan provider. Generally speaking, the account opening and funding process takes approximately 1-2 weeks.
When the account is open and funding is complete, we will trade your account in the following 2-4 business days.
When you open your account, you can or save your banking information for future transactions. Automatic deposit can be added by visiting the IB portal.
Additional funds are processed by IB and deposited into your trading account. Once received, we will process your deposit within 2-4 business days.
Withdrawals are permitted at any time. To withdraw some of the funds in your account, kindly submit a request to [email protected]. We cannot honor partial withdrawal requests that would leave your account below the required $100,000 minimum balance.

You are permitted one free withdrawal request every 30 days. If you must make an additional withdrawal within the 30 day window, your account will be charged a small fee by Interactive Brokers.

You can also submit a withdrawal request directly to Interactive Brokers; however, you will need to ensure enough cash is available to honor your request. It’s generally much easier to simply ask us to perform the withdrawal for you.
Please submit a request to our support team at [email protected] and we can provide the appropriate instructions. You will login to Interactive Brokers to add / remove banking information.
We continuously monitor your portfolio using “robust�? risk management rules. When our momentum and moving average rule “activates�?, we will sell those funds and move to cash. This action is an integral part of our downside protection system. In a market downturn, it is common to find a portion of one’s portfolio in cash as the market correction “plays out.�?

Generally, there will be a small amount of uninvested cash in your Alpha Architect Advisor account for the following reasons: We purchase only whole shares of ETFs for you. This leaves some cash uninvested until there is enough to buy more whole shares according to your plan. We also reserve a small amount of cash (.00208% of your monthly balance) to cover Alpha Architect Advisor’s advisory fees you’re likely to owe over the next month.
Interactive Brokers provides brokerage services to all Alpha Architect Advisor customers. Interactive Brokers is a member of the Securities Investor Protection Corp (SIPC), which means that the securities in your account are protected up to $500,000. For details, please see www.sipc.org. However, unlike FDIC insurance for banks, SIPC does not protect against loss of principal due to movements in the market value of your securities.

5. What are your fees?

Management fees: We charge 0.25% per year (25 basis points) to manage your account and provide optional downside protection.

Commission fees: We pay them. You don’t.

Transaction fees: We pay them. You don’t.

Active ETF expenses: For active portfolios, the weighted average expense ratio for the underlying product can range from 0.57% to 0.79%. This fee is charged in addition to the management fee above. These fees are higher than passive ETFs since these funds seek to outperform over long horizons. These fees are much lower than typical mutual fund fees or other alternative investments offered by active managers.
No. Beware of "free"? financial advice. Having been in the business, we witness all sorts of "free"? programs that actually cost the customer money. Examples include hidden transaction costs, kickbacks to sales reps, etc. We have built a robust firm on knowledge, integrity, and academic excellence. No sales people, no fancy offices, no glitzy VC-funded websites. We deliver high-conviction active management, with downside protection, supported by PhD research, top business school operations, and nationally present articles, blogs, and thought leadership. Our value proposition is compelling compared to other active advisors charging all-in fees in the 1.25% to 2% range. Click here to read about our value proposition.
No. We will pay this fee internally as a benefit to our customers. The cost we pay Interactive Brokers on your behalf is ~$30 / year for IRA accounts. We do not receive any part of this fee.
The management fees are accrued daily and charged on the last business day of the month and automatically deducted from your brokerage account.
Our streamlined portal will allow you to access your statements at any time. If you have any questions, you can always email us at [email protected]
No. There are no fees associated with closing your Alpha Architect Advisor account. The only exception is if you want to transfer your current Alpha Architect Advisor portfolio over to another brokerage (as opposed to liquidating it to your linked bank account). In this instance, our broker-dealer charges a $100 fee to transfer the funds. We do not receive any portion of this fee.
Dividend payments will accumulate as cash in your portfolio. We use that cash to pay our fees and will invest excess cash according to your asset allocation guidelines at the beginning of the month.
An automated advisor still requires customized back office support to each and every client. This is the minimum account we can profitably service while also covering the state, federal, and regulatory costs implicit in this business. As we scale operations, we will try and deliver our core value proposition to those with smaller capital bases.

6. How do you design my plan?

The online questionnaire is designed to assess your risk tolerance (low to high) your time horizons, liquidity, and preference for downside protection (on or off).
The online questionnaire is designed to determine an optimal portfolio for your investing needs based on your risk profile. You cannot design your own investing portfolio.
No. We chose each of the ETFs that we believe to represent the best exposure in each corresponding asset class. We can facilitate custom portfolios for ultra-HNW investors.
Risk management rules are typically assessed monthly and portfolio rebalances are generally facilitated on an annual basis to minimize frictional costs associated with active trading.
Yes. When you change your plan, the change will take effect the following month during the monthly rebalance. If you change your plan this month, it will take effect on the first day of next month.

To change your plan profile, simply submit an online request to [email protected]
The deposit is added to the total portfolio in such a manner that it rebalances the portfolio. Deposits are typically processed in 2-4 business days.
We will sell your positions proportionally based on your current portfolio to come up the amount you want to withdraw. Withdrawals are typically processed in 2-4 business days.

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