More Details on Motley Fool One Separately Managed Accounts

More Details on Motley Fool One Separately Managed Accounts 4.14/5 (82.86%) 14 votes

Motley Fool One continues to release more information related to their newest Wealth Management feature: Separately Managed Accounts (SMA’s). Recently they revealed minimum portfolio sizes for their SMA counts, as follows:

  • Motley Fool One Everlasting Portfolio: $35,000
  • Supernova Odyssey: $25,000
  • Supernova Phoenix: $35,000
  • Million Dollar Portfolio: $45,000
  • Motley Fool Pro: $300,000

As I’ve stated in the past, given the prices of Motley Fool One, you’d need a portfolio of at least $100,000 for the membership to be worth the cost. So the above are really bare minimums to participate and not practical portfolio sizes. The much larger $300,000 limit for Pro is due to the complexity of the strategies they employ.

You are also able to set up more than one SMA, so you could also allocate some of your account to multiples of the above, subject to the minimums of each.

Members are able to transfer over existing taxable accounts or IRA’s (including Roth IRAs), but not any employer sponsored accounts such as 401k’s. If any of these accounts hold existing stocks that are not part of the portfolio SMA that you will be following, those stocks will automatically be sold. So if you are considering participating in an SMA, make sure you keep this in mind.

And finally, although IRA’s can be accepted, the Motley Fool suggests using taxable accounts, because IRA’s often have contribution limits which could prevent you from following all the trades.

Let me know if you have any additional questions, and I’ll see if I can answer them.


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{ 17 comments… add one }

  • linda March 29, 2014, 12:13 am

    Very helpful info on the MA’s Your thoughts on subscribing to Everlasting,
    Odyssey, Million Dollar Port and mirroring Pro? Overlap and duplication?
    Thanks Linda

    Reply
    • Kevin March 29, 2014, 3:31 pm

      Linda, there is some overlap with those services in terms of their holdings so you could end up over allocated to a few individual stocks. Style wise, EP and Odyssey are very similar (long term buy hold growth). Personally I think a combo of odyssey and pro could be a good choice Odyssey gives you the growth and pro could provide generally lower risk exposure with less overlap on the holdings as well. I’m just not as close a follower of MDP but their performance is not as strong as SNO and they aren’t as focused on risk management as pro so I just don’t see the benefit vs. the other choices.

      Reply
      • linda March 29, 2014, 3:47 pm

        Thanks Kevin. I value and appreciate your analyses. The only troubling
        feature about pro, as I see it, would be the tax ramifications —-all short term trades. I could be wrong in my analysis.

        Reply
        • Kevin March 29, 2014, 3:57 pm

          That is a valid consideration. But the amount of selling they do is still fairly limited and usually qualifies for long term cap gain treatment.. They aren’t actively trading in and out of positions. So I wouldn’t consider that a major factor.

          Reply
  • Jim April 5, 2014, 12:40 pm

    Kevin: Thanks for the analysis. Considering all the info, it appears an IRA investment in MF’s new SMA program would be “iffy” in your opinion, especially if it is an IRA for retirees and no additional deposits will be made. Given this situation it looks like MF Pro and Supernova Odyssey are not good candidates, leaving only EP, MDP and Supernova Phoenix. Under what conditions would you invest such an IRA in the new SMA program? (Thanks!!)

    Reply
    • Kevin April 5, 2014, 6:12 pm

      Jim, Phoenix seems like the most logical fit since they will be entering a phase of not adding new money, and the portfolio is geared towards retirees and near retirees. EP could also work since they are only buying stocks once per quarter and will hold for at least 5 years, so the trading activity will be limited.

      Reply
  • Robert April 11, 2014, 2:41 pm

    My understanding is that it’s possible to transfer 401k’s into Motley Fool SMA’s. You must be over 59-1/2 and the 401k must allow in-service distributions. Have you heard of anyone doing that?

    Reply
    • Kevin April 15, 2014, 9:24 pm

      Hi Robert – I found this on the Motley Fool SMA FAQ:
      You can use IRAs, including Roth IRAs, unless you choose to follow Motley Fool Pro, which uses shorting and types of options trades that are not supported in IRAs.

      Sorry, but SMAs cannot support 401(k)s or trusts. Motley Fool SMAs are a new product that MFWM is rolling out in phases. Their goal is to offer more account types in the future.

      Reply
  • linda April 27, 2014, 11:14 am

    Kevin for some reason I haven’t been receiving any of your posts on motley fool one I subscribed to Pro and am now considering Million Dollar p ort for
    my IRA. Since MDP consists of the best picks from all of the services, I felt it must be the best investment. What are your thoughts? Thanks

    Reply
    • Kevin April 29, 2014, 9:45 pm

      Linda, try subscribing again via the email subscribe box on the right hand side of the page. Let me know if you are still having issues after that. In terms of MDP, it doesn’t necessarily mean they are picking the best picks, but only that they have the prerogative to pick from those stocks. I don’t follow MDP that closely but the advisor team is pretty strong, and their performance is solid. So not a bad choice if that’s what you are considering.

      Reply
  • Wanda January 19, 2015, 3:57 pm

    I just discovered you this a.m. and have read several hours of past material.
    I’ve entered the MF Lobby and applied to join SMA. I lost my breath when I saw prior year joining fees.
    I lost 40% of my portfolios several years ago and put remaining dollars in CDs…earning almost nothing.
    About 3 weeks ago I signed in for Stock Advisor and bought stocks for my IRA – I kept cash there for years.
    I retired 20 years ago and have lived on my monthly annuity. I own my home and new car outright.
    My worry. I have about $300K to invest in SMA but I just want to be on auto-pilot once the account is set up. The SMA will pass on to my child upon my death. Hopefully, I will never have a need for the money. I’m frugal and it bothers me that I will be paying for a lot of services I don’t plan to use in MF One but I can’t figure out a better way. I’m 75 years old.
    What do you think? Any ideas?
    Thanks in advance. (Sorry this is so long).

    Reply
    • Kevin January 19, 2015, 6:24 pm

      Hi Wanda – thanks for the question. I don’t have all the details of your financial situation and I’m not a licensed financial advisor, so keep that in mind as I write this response. SMA’s offered via the Motley Fool follow one of their portfolios, so you have to make sure you are choosing the right portfolio (e.g. Supernova Phoenix, Supernova Odyssey, Pro, Everlasting Portfolio etc.) for your purposes – so there is some research for you to do there, if you haven’t already. And if all you are seeking from a Motley Fool One membership is that SMA option, then I agree that paying all that money for “extra services you won’t use” doesn’t seem like the best approach.

      It also seems like you are just looking for a safe place to invest your money to leave as an inheritance – if so there are probably cheaper ways to do that – another IRA, buying a couple of broad market ETF’s, etc.

      Finally, another option – Motley Fool One usually offers a money back trial period. You could join, kick the tires, and in particular try the Ayco financial advisor service that offers generalized advice on estate planning, etc. – they could probably give you some guidance on the best way to handle that 300K you are looking to leave as an inheritance.

      Hope that helps.

      Reply
      • Wanda January 20, 2015, 8:19 am

        Thanks Kevin. I really appreciate your response and I think I will give MF One a try and use the Ayco service.
        I will be looking forward to your future comments. I learned a lot from you about the MF One SMAs.

        Reply
  • Melissa March 3, 2015, 11:49 pm

    I would be interested in your evaluation of the ease or difficulty in going through the process of setting up an SMA. I joined One in the hope of transferring a couple of inherited accounts (brokerage/IRA) into SMAs as I was overwhelmed with how to align them with my financial goals. I have subscribed to two newsletters in the past and I have found the advice, for the most part, helpful in managing my retirement accounts. However, I find a big disconnect between the marketing “hype” (and I agree MF marketing verges on used car salesperson hype) of how “easy” it is to set up a SMA and the reality. Only after several weeks of joining did I begin to see some videos actually discussing in detail how to go about creating a SMA. Should have been right there in the Welcome to One materials. I do have some issues around needing to do a partial ACAT and not transfer all the funds in the brokerage account straight into a SMA but it took lots of emails to customer support and several calls to even learn about a partial ACAT. I’m considering getting a refund as the process has been so hit and miss for me. For $7K I expect a little more professionalism from MF.

    Reply
    • Kevin March 4, 2015, 4:16 pm

      Hi Melissa. I haven’t gone through the set-up process personally, so can’t speak to that, but in reading the forums, I’ve seen other people who have had problems with the technical and process aspects of setting up SMA’s. Motley Fool is really moving ahead quickly with expanding their SMA offerings, because as I predicted, the original roll out seems to have been a big success. However, I get the sense that they are tripping over their own feet in their rush to expand. Their specialty is content and investment advice, and their infrastructure tends to lag behind whenever they roll out something new.

      Reply
      • Melissa March 5, 2015, 2:59 pm

        Hi Kevin. Thanks for the response to my rather cranky post about the clunkiness of setting up a SMA. I’m really beginning to reconsider whether all the effort this is taking is worth it and may ask for a refund. I agree that having this option is at least one outstanding feature of being a One member. I have a quick follow up question. In your response, you mention “forums”. Are you referring to your web site or the MF discussion groups? I thought it might be helpful to connect with other members having difficulty with SMAs. And last, they should have you writing their marketing materials. I learned more from your explanations about the pre-work needed to set up a SMA that in several hours of reading/watching videos on MF. Kudos!

        Reply
        • Kevin March 5, 2015, 3:40 pm

          Thank you – I appreciate the kind words, and glad you find this all helpful. My comment regarding the forums was in reference to the Motley Fool One forums on their site. And you should definitely throw out a question on their forums, as the community can be very helpful, and you may get the attention of one of the actual MF advisors, who may be able to expedite your questions/issues.

          Reply

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