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Formula Folio Investments Review

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Formula Folio Investments, registered in 2011, serves 52 state(s) with a licensed staff of 30 advisors. Formula Folio Investments manages $3.5 billion and provides investment advisory services for 22,837 clients (1:762 advisor/client ratio).



Firm Information


Summary Firm
Minimum Investment Ask firm
Average Client Balance $151,816
Total AUM $3.5 billion
Fee Range Ask firm
Advisor / Client Ratio 1:762
Languages Offered Ask firm
Specialities Ask firm
Website Visit Site
Phone Number 616-667-2150
Headquarters Grand Rapids, MI
Locations See locations
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SEC Filings View SEC IAPD CRD #153467


Disciplinary Questions


After checking the disciplinary records of Formula Folio Investments, our system found no disciplinary questions to ask. Checks take place monthly.



Conflict Questions


After checking the regulatory records of Formula Folio Investments, our system has identified the following question(s) to ask. Learn more.


Does Formula Folio Investments offer mutual funds that have 12b-1 fees?


12b-1 fees increase the total annual cost of owning a mutual fund with no guarantee of higher returns. Some firms receive these fees as payments, which creates an incentive to promote them.


Regulatory disclosures state that Formula Folio Investments sells proprietary investments and products. Please provide me a list of the products and a summary of how much Formula Folio Investments earns from them.


Formula Folio Investments recommends proprietary investments and products that could generate larger commissions than other similar non-proprietary products. This could also limit the number and diversity of investment options available to you and may impact their transferability. Do not be afraid to ask how much they will earn from the product or what other non-proprietary options are available.


Does Formula Folio Investments offer products that have performance-based fees, or does it accept performance-based fees? Will any of my assets be invested in those products?


When performance-based fees are charged, the financial advisor is paid for outperforming a benchmark, typically an index. While this may seem like an attractive compensation structure to ensure your advisor is making your money work for you, often, the managers of those products are incentivized to take inappropriate risks to beat their performance benchmark. For instance, research has shown that mutual funds that use incentive fees take on more risk that funds that do not, and tend to double down and increase their risk following a poor performance. This could be detrimental to a client during down markets.


Does Formula Folio Investments perform side-by-side management? How does Formula Folio Investments mitigate conflicts that arise from managing accounts with differing fee structures?


This typically occurs when firms manage mutual funds or hedge funds alongside smaller retail accounts. Side-by-side management can create an incentive for the advisor to favor the larger funds, potentially leading to unequal trading costs and unfavorable trade executions for their retail clients.


Which securities does Formula Folio Investments trade for itself that it will also be recommending to me?


Formula Folio Investments has marked in their disclosures that they trade recommended securities. While this often can be seen as "eating your own cooking," there are several inherent conflicts that can arise. For example, front running is when a financial professional buys or sell securities ahead of their client. In short, any financial professional should disclose all positions they hold (or have sold short) that they will also be recommending to you.


Our system found no other conflict questions to ask. Checks take place monthly.



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Disciplinary History


An important aspect of the Trust Algorithm is processing the SEC Form ADV Part 1 filing of each Registered Investment Advisor (RIA). “Item 11 Disclosure Information” contains a list of valuable disclosures that are relevant for Americans.

As identified in SEC Form ADV Part 1, Item 11 “Disclosure Information”, the Trust Algorithm identified the following disciplinary disclosures for Formula Folio Investments:




Cost


Unfortunately, there is no single, uniform pricing standard for working with a financial advisor. Catchphrases, including "fee-only," can be helpful; however, Americans often get confused with competitors promoting "fee-based" in response.

Ultimately, to understand the underlying costs of advisory services, we always recommend asking for an itemized fees breakdown and reading the firm's ADV Part 2 Brochure (Item 5, "Fees and Compensation").


View Fee Disclosures




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This automated report was generated using SEC and FINRA data and was last updated on October 4th, 2021*. For data support, email "support@investor.com". Views: 231 (trailing six months). Firms that receive a 4.5 or 5-star rating are considered Trusted by investor.com. Learn more.


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