Folio Investing: Getting Started

Folio Investing offers many advantages but the biggest is its easy “percentage-based” implementation of FFP’s recommended model portfolios.

Once your account is opened and funded, it only takes a few minutes to accurately invest in the appropriate model portfolio. Additionally, future deposits and withdrawals are easily executed allowing “on the fly” rebalancing with no spreadsheets or calculations.

If you would like to “test drive” their platform, follow the instructions below to open an account and then use their “watch account” feature to experience the trading features without using real money. Note: Folio does not charge for any accounts that are open but not funded.

Follow these instructions to open your accounts at Folio:

  • Go to Folio Investing and review the basic plan pricing and other fees.
  • Choose “open new account” in the upper-right corner.
  • When prompted for pricing, choose the “basic plan.”
  • Open any non-Roth IRA(s) as a “traditional IRA,” not a “Rollover IRA.”
    (The distinction is irrelevant to the IRS but the “traditional IRAs” at Folio allow potential future contributions while “rollover IRAs” do not)
  • For IRA accounts, make sure you name primary and contingent beneficiaries.
  • For Joint accounts, name the spouse with the most Folio accounts FIRST on the account (Folio charges a quarterly maintenance fee of $15 if no trades; this fee applies to each SSN so if only one spouse has a Folio IRA, use that same spouse’s SSN first on the joint account so as not to be charged for both SSNs).
  • For Joint accounts, open as “Joint with rights of survivorship” unless your estate attorney advises you otherwise.
  • After your accounts are opened, select “settings” from the drop-down below your user name in the upper-right corner then page down and click “change: cancel order limit” and select “5%.” Do this for each of your accounts.

After you open your account(s), grant FFP view-only access as detailed below.

View-only access instructions:

  • Upper-right hand corner “username” drop-down box and “settings.”
  • Then, right-hand margin “authorized access.”
  • Choose the account from the drop-down box, enter my user name, “jgayffplan” and DOB, “10/31/1967.”
  • Choose “Detail level viewer” and then “grant access”
  • On the next screen, “grant access to all documents and email messages,” then “grant access.”
  • Repeat this process for each of your accounts.

Set up Folio EFT bank link for withdrawals:

  • Main account screen: click on “deposit or withdraw money.”
  • Then “bank links” subtab and “add new bank link”
  • Follow the instructions, verify the two micro deposits within a few days (Folio will prompt you with emails)

Liquidate holdings at your current brokerage firm:

Note: for IRA accounts, do NOT instruct the broker to distribute funds out to you, just liquidate securities to cash within the account. For taxable (non-IRA) accounts, you may incur taxes on securities sales. Make sure you determine the tax consequences and pay the IRS if necessary.

Transfer accounts to Folio:

IRA accounts: Once your accounts are opened at Folio and securities liquidated at the carrying broker(s), go to “account quicklinks” and “transfer securities” and enter the required information to transfer each of your outside accounts to Folio.

Taxable (non-IRA) accounts: Once your accounts are opened at Folio and securities liquidated at the carrying broker(s), have the other brokerage firm wire, electronically transfer, or mail a check for the funds to you. You can then fund your taxable Folio account using one of the cash methods shown above (wire, EFT, or mailed check).

Previous employer retirement plans: After opening your Folio accounts, contact the plan administrator or HR department and complete the paperwork to roll over the funds to your IRA account at Folio.

Note: most brokerage firms charge a transfer out fee (typically $50) for each outgoing transfer.