Sensible Perspectives

Raising Cash – A Deeper Look

Posted by on December 13, 2018

Filling a one-time need for cash from your Sensible-managed portfolio takes a little time. While you may be able to withdraw cash immediately from your bank account, an investment account is different. Allow me to fully explain this step-by-step process.

The process begins when you contact your advisor with your cash request. Perhaps there are other sources of cash more appropriate than your investment portfolio. Perhaps the advisor needs to do some brief analysis to determine the best account from which to draw funds – there may be tax implications. A conversation may help to determine the best course of action. Once we’ve identified the best approach, your advisor will open a “raise cash case.” Depending on the complexity of the situation, it may take as long as 1 business day until this case is opened.

The Investment Operations Specialist (IOS) can now draft trades. Our goal is to meet your cash needs and minimize capital gains (and capital gains taxes), while staying true to your investment model. We may harvest capital losses (which reduce taxes) where appropriate. We may consider selling non-model legacy securities to align more closely with your model. Once the IOS has drafted trades, Rick Miller or another Senior Advisor will review. This will take another 1 or 2 business days.

The IOS can now place trades. For mutual funds, cash settles in 1 business day. For exchange-traded funds (ETFs), cash settles in 2 business days[1]. Once cash settles, it can immediately be moved into an investment account at the same custodian. If money is moving to a bank account or an investment account elsewhere, this will take 1 business day[2],[3],[4]. This process (from trades placed to money arrived) takes 1-3 business days.

When you ask us to deliver cash for which there are no standing instructions (such as wiring funds for a home or car purchase), more time may be required. As you may be aware, cyber-fraud is a significant problem. Your custodian and Sensible Financial have implemented more stringent security procedures to protect you.

Raising cash (from your request to money arrived) can take 4-6 business days to complete[5], but in an emergency, we can move more quickly. Our process is careful and methodical – we want to minimize the possibility of error. We take our responsibility to act in your best interest very seriously. Please reach out to your advisor with any questions.


[1]In a pinch, we can place ETF sales to settle same-day or in 1 day. This requires some extra legwork, so we prefer to do this only if your need is urgent.

[2] Wire transfers can move money same-day for a small fee. We need “standing instructions” to do this – the ability to move money into the intended account.

[3] Physical checks typically take up to 7 business days to settle in the receiving account once mailed. There is a small mailing fee.

[4] International transfers can take 10 ­­business days or even more.

[5] If standing instructions do not exist, this can delay money movement.