Frequently Asked Questions

Our company is “Cambria Investment Management.” We’re proud to offer many investing products and services to meet the varying needs of our clients, which include individual investors, institutions, and registered investment advisors. Our “Cambria Digital Advisor” service is our managed investment account service for individual investors. Click here to lean more about a Cambria Digital Advisor account.

As a fiduciary, Cambria’s major concern is “how do we best serve our clients?” While we believe our investing approach is the best market strategy for serving our clients, we partnered with Betterment as we believe their operational and technological platforms make trading, rebalancing, and tax loss harvesting simple and efficient. Furthermore, we believe Betterment’s intuitive, beautiful client interface is superior to that of any other current offering.

The asset management business is a $30 trillion+ industry, and most of the low-cost automated investment solutions (such as Betterment) are far better than other options on the market today because of their much lower fees. For instance, many mutual funds and advisors still charge over 2% a year.  While our investing philosophy is different than that of Betterment’s, we think both solutions are reasonable. We’ve recommended Betterment in the past and find them to be a great partner.

Sure. Email Betterment support at support@Betterment.com to get the process started.  Since you will not be going through the normal onboarding process, we will send you the Cambria client agreements, ADV Part 2A, and Privacy Policy – no signature needed, just an email confirm that you received them.

If your assets with Betterment are held in a taxable account, then yes.

No. However, we are currently working with Envestnet to offer our Trinity portfolios to advisors on its platform.  We expect this offering to be available sometime in Q1 2017, and will send out an announcement when it is available.  Please keep in mind, you can always replicate the six Trinity allocations in your own practice. We publish the underlying assets found in each Trinity portfolio, as well as the specific allocation amount of each holding, here on this website in on our “Our Portfolios” tab.

Cambria charges a 0% management fee on all personal investment accounts. The client pays a 15 basis points (0.15%) platform fee which passes through to our technology partner, Betterment. The client will pay no commission on trades, no fees on tax loss harvesting, and no rebalancing fees. The total fee paid by client is 0.15% plus the underlying fund costs, which varies per the ETFs, but we create our portfolios with only low-cost ETFs.

We construct our six Trinity portfolios with what we believe are the best ETFs in the market. Some of these ETFs come from respected providers such as Vanguard, while others are our own (Cambria’s). Whether from Cambria or an outside provider, these ETFs have related expense ratios. Therefore, Cambria generates revenues from the underlying expense ratios of its own ETFs. Cambria’s average underlying ETF fee is 0.54%.

To open an account, we require an initial account balance of $100,000.

Yes. The $100,000 minimum is an aggregate amount. You can open accounts with smaller balances as long as your total investment with Cambria across all your accounts totals a minimum of $100,000.

The right Trinity Portfolio for you will depend primarily upon your investment goals and your personal risk tolerance. Our six unique Trinity portfolios range from most conservative (Trinity 1) to most aggressive (Trinity 6). To read more about each individual Trinity portfolio, just click here. In addition, one of our advisors will share a short phone call with you upon opening your account in order to answer any questions you have, and make sure you’re in the correct Trinity portfolio to match your investing needs.

We offer six different Trinity portfolios, ranging from most conservative (Trinity 1) to most aggressive (Trinity 6). You can read more about the different portfolios by clicking here.

We work together with clients to build a strategic asset allocation with which they’re comfortable. If a client wants to discuss their portfolio and any potential changes, we’re happy to schedule a call or meeting for such a review. However, clients cannot alter their portfolio themselves prior to this discussion, as this often allows for emotional behavior that negatively affects returns. (However, a client can always terminate the Cambria Investment account at any time.)

Unfortunately, Betterment is not setup yet for foreign investors.  However, we suggest two options for our international friends:

a) Open an account at Fidelity.  We can implement all of the Trinity portfolios at Fidelity. Unlike Betterment, Fidelity does not charge a platform fee of 0.15%, but does charge their standard commission rates on trades.  Please reach out to sm@cambriainvestments.com if you are interested.  Tax harvesting is not yet available at Fidelity.

b) Simply invest in Cambria ETFs that mimic the Trinity allocations through your local brokerage.

Cambria is consistently reviewing all ETF offerings for best of breed funds based on methodology and pricing.  Currently, our portfolios consist of approximately 13 ETFs. They come from eight different respected providers such as Vanguard and iShares, as well as Cambria’s own suite of ETFs.

Many investors prefer to invest on their own. In such cases, investing in Cambria’s ETFs would be an appropriate course of action. However, many other investors prefer the convenience of opening an investment account, as well as the confidence that comes with knowing experts are behind all market decisions. For these investors, a Cambria Investment account is preferable. Opening an account effectively outsources the trading and rebalancing efforts, so clients can spend their time elsewhere. An account also offers the benefit of giving clients access to an advisor whenever they have questions about their portfolio, the strategy, or the market.

To add a checking account, we need to make sure you own that account by having you confirm two random deposits/withdrawals we put into that account. After entering your bank account information, you will then complete the following steps to confirm your bank account with Cambria:

• Log into your checking account at your bank.
• Find the two small random amounts under $1.00 we have deposited and immediately withdrawn from your account – please note, you may have to wait up to two business days to see these deposits.
• Log into your account at CambriaInvestments.com.
• On the Transfer tab, in the Confirm Two Small Deposits window, tell us the values of the two random deposits in your account.
• That’s it, you’re ready to start investing!

To change your linked account online, click your name at the top right hand side of your profile, and click “Settings”. You can change your bank account under the “Bank Account” section of the page.

At this time, our customers can only have one active checking account at a time linked to their Cambria account. Multiple linked bank accounts may be something we provide in the future.

Please Note: Because electronic transfer is the primary way to move money to and from your Cambria account, you will not be able to delete the link to your checking account unless you add a new one.

Individual (“Personal”) or Joint Taxable Accounts

With taxable investment accounts, you generally owe taxes each year on the dividends and other distributions paid to you that year.  You may also owe taxes when you sell shares, depending on whether or not you’ve realized capital gains on the investment.

Taxation of Dividends

Most ETFs pay dividends, reported on Form 1099-DIV. These are generally taxable, typically at your ordinary marginal tax rate (0-39.6%, Federal). For high earners, an additional 3.8% “net investment income tax” applies. Certain ETFs that hold stocks may distribute “qualified” dividends, which are potentially subject to lower tax rates (Box 1b). Some ETFs hold municipal bonds, which pay dividends that are partially or wholly exempt from federal and/or state tax (Box 10 of 1099-DIV).

Other Distributions

Some ETFs make distributions parts of which are not taxed as dividends, but rather as capital gains, or return of capital. Capital gains distributed are reported on Form 1099-DIV as well (Box 2a).   Return of capital is rare, but could apply, for example, to real estate ETFs that sell some of their holdings, and is reported in Box 3, 8 or 9 (See IRS Pub 17 for details).

Foreign Tax Paid

For ETFs with non-US holdings, the 1099-DIV can indicate foreign tax paid. This could happen when such ETFs have already paid foreign taxes on distributions made by companies in foreign jurisdictions, before passing them on to U.S. shareholders. To mitigate double taxation on the same income, the U.S. rules potentially allow for a deduction or tax credit for these amounts (Box 6).

Taxation of Capital Gains

At Cambria Investments, we sell shares on your behalf whenever you withdraw funds, change your allocation, or we rebalance, harvest losses, or assess our fee. When you sell shares that have appreciated, you realize capital gains tax. If the investment has depreciated in value, you realize a capital loss, which is used to offset other gains that you realized that year, and any excess loss may be deductible from your earned income, up to a threshold set by the IRS.  Losses not used that year may be carried forward to future years.  The amount of capital gains tax you owe depends on your net gains (including losses carried over from prior years) and how long you held your investments before selling.  Short-term capital gains tax applies if you sell shares you held for one year or less. The federal short-term capital gains tax rate is the same rate as your income tax rate (0-39.6%). Long-term capital gains tax applies if you sold shares you held longer than a year, and ranges from 0-20%. For high earners, an additional 3.8% “net investment income tax” is added for both. For each ETF across your portfolio, Cambria’s TaxMin algorithm automatically sells losses first (starting with shares which have the highest cost) and if realizing gains is unavoidable, it prefers long-term over short-term, which is likely to reduce your tax burden. All sales, including sale price, cost basis, and holding period, are reported on Form 1099-B.

Traditional IRA or SEP IRA

Traditional and SEP IRAs may afford a deduction against your ordinary income in the tax year during which you contribute funds, if you qualify based on your income.  Any dividends you receive are automatically reinvested by Cambria Investments, and grow tax-free until withdrawal.  When you withdraw from the account, taxes are generally due at your ordinary income tax rate applicable at that time, both on earnings and on all contribution amounts that were previously deducted.  Penalties may also be due if you don’t meet the withdrawal qualifications (e.g., you withdraw before age 59.5).  Read more from the IRS on IRAs and SEP IRAs.

Roth IRA

Roth IRA contributions are made with dollars you’ve already been taxed on — you don’t get a deduction.  However, at retirement, as long as you’ve held the account for at least five years and met the other qualified withdrawal criteria, none of the amount withdrawn is taxed.  Any dividends you receive are automatically reinvested by Cambria Investments, grow tax-free, and are also withdrawn tax-free.  Read more from the IRS on Roth IRAs.

Cambria Investments is not a tax advisor, nor should any information in this article be considered tax advice. Please consult a tax professional.

Your 1099 tax forms are automatically imported to your Cambria Investments account in mid-February, in both CSV and PDF formats. We will notify you via email when these are ready. We will also integrate with Turbo Tax, H&R Block, and TaxACT. Unlike other online advisors, we make our forms in-house, with clear summaries provided.

To see tax forms from previous years, please review your Activity page, and then click the “Tax Forms” tab.

The forms are not available prior to February due to the 30-day window related to certain TLH+ requirements, which carry through the end of January. Additionally, we need final confirmations on distributions from fund providers regarding their dividend payout classifications. Cambria Investments strives to provide tax forms well in advance of the Feb. 16, 2016 deadline when possible.

Your 1099-DIV is a record of all dividends and distributions earned in your Cambria Investments account during 2015. It includes taxable dividends and distributions as well as exempt-interest dividends paid by municipal bond ETFs. There are multiple boxes on your 1099-DIV, each of which reports a different piece of information which must be included in your tax return:

Box 1a Total Ordinary Dividends: The total amount of dividends and short-term capital gain distributions paid in 2015.

Foreign tax paid (reported separately in Box 6) is added to the dividends and distributions reported in Box 1a as well. If you had foreign tax paid in 2015, the total amount reported in Box 1a will be higher than the amount actually received. For more information on foreign tax, please refer to IRS Publication 514.

Tax-exempt dividends (reported separately in Box 10) are not included in Box 1a. If you received tax-exempt dividends in 2015, the total amount reported in Box 1a will be lower than the amount actually received.

Box 1b Qualified Dividends: The amount of dividends included in Box 1a that are subject to applicable long-term capital gains rates.

Box 2a Total Capital Gain Distributions: The total long-term capital gain distributions paid to you in 2015. These differ from long-term sales reported on your 1099-B, and instead come from the distributions paid by some ETFs.

Box 6 Foreign Tax Paid: The total foreign income taxes paid in 2015 on income from the ETFs’ investments in foreign securities. Federal tax law can permit U.S. taxpayers to take either a deduction or credit for these taxes; for more information please refer to IRS Publication 514 or consult with a tax professional.

Box 10 Exempt-Interest Dividends: The total amount of tax-exempt dividends paid by municipal bond ETFs in 2015.

Please note that Cambria Investments is not a tax advisor and the information provided should not be construed as tax advice, but should be used for informational purposes only. Please consult a qualified tax professional or the IRS to determine the rules that apply to your individual tax situation.

Electronic deposits from your bank to Cambria Investments typically invest the following business day for deposits made before 11PM EST. This includes requests made on Saturday and Sunday. The only exception is auto-deposits that fall on weekends. If your auto-deposit falls on the weekend, it will invest on Tuesday (assuming that Monday is not a market holiday).

Electronic withdrawals from Cambria Investments to your bank generally take 4-5 business days due to the required sale and settlement of securities. For example, if you made a withdrawal on Monday morning, you can expect your funds the following Monday (assuming that there are no market or bank holidays in the interim). Note that your withdrawal time may also be impacted if you have made recent deposits within the previous 5 business days.

Deposits must be initiated by 11PM EST to be invested by the next business day. Withdrawals must be initiated 30 minutes before the stock market closes at 3:30PM EST to be transacted that day. Trade requests initiated after these cutoff times, or during weekends and holidays, will be processed the next business day.

Cambria Investments does not guarantee specific execution timelines. We avoid trading on or around market open or close, as markets have historically been more volatile during this time. Pending wait times are imposed by banking and market rules and cannot be sped up by Cambria Investments.

The annual limits for 2015 IRA contributions are $5,500 for individuals under 50 years old, and $6,500 for those who are 50 and over. These contribution limits remain the same for 2016.  The limit is assessed across all of your accounts, so if you have reached the limit with one provider you are not allowed to contribute to another account.

There are additional contribution limits to a Roth IRA, and deduction limits to a Traditional IRA, based on your income and other factors. Please speak with your tax advisor.

Tax loss harvesting is selling a security that has experienced a loss—and then buying a similar asset to replace it. The switch does two things: it allows the investor to realize, or “harvest”, a valuable loss while keeping the portfolio balanced at the desired allocation.

Capital losses can lower your tax bill by offsetting other gains or ordinary income up to certain levels.  But the only way to realize a loss is to sell the asset that has experienced a loss. However, in a well-allocated portfolio, each asset plays an essential role in providing a piece of total market exposure. For that reason, an investor should not want to give up the expected returns associated with each asset just to realize a loss.

You will receive a 1099-B corresponding to any tax loss harvests that occur in your account during the year (as harvests involve a sale in order to realize a loss). This is in addition to non-TLH related investment sales generally (e.g. money withdrawals, allocation changes, or portfolio rebalances).

To turn on Tax Loss Harvesting+, first log in to your Cambria Investments account. On the Summary tab, click “Get Started” in the Tax Loss Harvesting+ part of the overview section. As part of the enablement process, you will answer a couple questions to ensure you are eligible. Once you have enabled TLH+, it can take up to one business day for your portfolio to transition and for harvest checks to begin.

An exchange-traded fund (ETF) is a security that tracks an index, a commodity or a basket of assets just like an index fund, but trades like a stock on an exchange. ETFs track fairly closely to the indexes that they follow, such as the S&P 500 or the Dow Jones Industrial Average. ETFs are bought and sold like stocks throughout the day, and therefore experience continually changing prices. Cambria Funds uses ETFs in both our stock and bond portfolios because of the liquidity, diversification, and low management fees they provide.

When you are thinking about buying an ETF, the Expense Ratio is pretty much all you need to know. ETF managers make money by deducting the annual expenses from the dividends they pay out through the year, and they tell you in advance how much that will be. There are no costs to buy or sell ETFs, and no hidden expenses. If you trade through a broker, the broker will charge you a commission to execute the transaction for you. Cambria Investments covers these transactions for you.

Open-end mutual funds have purchase and redemption fees. These fees range from 0.25 percent to 2 percent and are charged by the fund to buy shares or to sell shares within a specified (usually short) period of time. Purchase and redemption fees differ from a commission because the money goes back into the fund rather than to a broker. These fees are meant to discourage short-term market-timing.

Mutual funds also have internal trading fees which are not disclosed on top of the stated fee. They are estimated to range from 0.11% of assets to 2%, with an average of 1.44%. The Wall Street Journal has a good primer on this issue. Many passive index mutual funds’ undisclosed trading fees are likely quite low, but they are non-zero, so that’s something to consider when doing a pure cost comparison.

Methodology Summary

RetireGuide™, available to you from our friends at Betterment given our partnership with them, is a retirement planning tool that gives unbiased, holistic advice to help you stay on track and achieve your goals. We help you figure out how much you may spend in retirement (your after-tax income from all sources). We tell you how much you need to save, and even which accounts to save in, whether it’s (Employer plan, Traditional vs Roth IRA, Taxable). And for more accurate advice, you can easily and securely sync all of your retirement accounts, not just those with Cambria Investments.

Download the full RetireGuide™ Methodology, created by our friends at Betterment, here.

Cambria Investments supports both revocable and irrevocable trusts that are authorized to invest in securities. In order to open a trust account the trust has to be a U.S. domestic trust, have been previously established, and is in good legal standing.

Cambria Investments joint accounts enable two people to share and progress toward investment goals together. Both holders of the joint account have full access to the joint account and are able to create goals, transfer funds from the linked checking account, change allocations, and view the account.

Two customers in a joint account have joint ownership of the assets in the account. Upon death of one of the joint account owners, the assets are transferred to the surviving account holder.

Note: At this time goals and assets held in a personal (individual) account are displayed separately from goals and assets held in a joint account. You can switch between your joint and personal accounts by logging into your account and then selecting the account you wish to view from the “Welcome” drop down menu on the upper right.

SmartDeposit is another wonderful feature created by our friends at Betterment. It’s an automated cash investment tool that puts more of your money to work by investing your excess cash. That means no more manually figuring out how much to invest each month or stressing over whether you are saving enough to reach your Cambria Investments goals. And, you have total control over the entire process with the liquidity you need. Here’s how it works:

1. You tell us the maximum amount you need in your bank account.
2. You set how much we invest at a time.
3. At least once a week, we automatically invest any excess cash up to the amount you set.
4. You will receive notifications before any transfers, so you can modify or cancel.
5. You can access your money at any time, with no Cambria Investments fees. Please keep in mind that there may be tax implications when selling your securities.

SmartDeposit is dynamic and calculates your ability to invest based on the settings you choose. It adjusts to your spending habits and ensures you are invested in the market as much as you can be. Auto-deposits are scheduled, set amounts that do not fluctuate based on your behavior.

Through our partnership with Betterment, Cambria Investments has incorporated bank-level security measures in everything that we do. This includes the strongest available browser encryption, secure servers, and identity verification services, among other precautions.