What happens when you change the allocation or risk score in an Automated Investing Account?

For Taxable Automated Investing Accounts:

When you change your risk level or customize your allocation, it takes time to transition to your new target allocation — and varies based on your current holdings and any tax implications.

Our software normally buys and sells investments in a way to help minimize taxes, so your allocation may differ from your target allocation for an extended period of time — particularly if you have a lot of embedded capital gains in your account.

When you make new deposits, receive dividends or when overweight asset classes subsequently trade at a loss, we’ll use these opportunities to transition your account to your new allocation.

If your taxable account is over $5,000, you can choose to transition your portfolio sooner, which typically happens within 1-2 trading days. This may incur more taxes. To do this, when you submit your new allocation, click Update transition preference and Transition sooner.

Note: If you fully remove Direct Indexing or Risk Parity, we will sell all associated investments immediately, which can lead to significant tax consequences.

For IRA or 529 Accounts:

When you update your allocation in an IRA or 529 College Savings Plan, your portfolio will typically reflect your new allocation within one trading day.

For all Automated Investing Account types:

Our software is designed for long-term investing, so if you’re frequently changing your risk level or customizing your allocation, those changes may not be reflected immediately.

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