Sensible Financial® has developed a process that balances your need to get cash quickly with your other interests, such as maintaining your target allocation, keeping trading costs down, and maximizing your after-tax return. We work to keep the number of positions in your portfolio small and to limit the realization of capital gains whenever possible.
The process begins when you contact your advisor by phone or email to let him or her know that you need to withdraw money. We want your advisor to be your first point of contact because a conversation may be important to determine the best way to meet your cash needs (which account the funds should come from, where you would like the cash delivered, etc.). We also want to be sure that it is you who is asking for cash from your account! Your advisor will respond via phone or email to confirm your request and the actions we will take.
Next, your advisor will open a “case.” This is a systematic process encoded in our internal management system. The case specifies the account the funds will come from, the amount of cash you need, where you want the cash delivered, and when you need it.
First, our Office Administrator will determine whether any paperwork is needed to carry out your request. If we already have a link between your investment account and your bank account, then no paperwork will be needed.
The case also assigns a trade development request to our Investment Operations Specialist. He will draft a tentative set of trades to raise the cash you need. Rick Miller or another Senior Advisor must approve every trade before we execute it. We may revise the trades several times before they are ready to execute.
Once the trade is approved, our Investment Operations Specialist will send you an email before trading. For most clients, this email includes a link to a PDF report of the trades in your secure Sensible Vault. If you have granted us discretion, this PDF will inform you of the trades that we will place for you. If we don’t have discretion for you, the email asks your permission to place the trades we are recommending. We need approval from all owners of an account or accounts before we place trades for non-discretionary clients. Because of the required exchange of communications for non-discretionary accounts, it almost always takes longer to free up cash.
After we place the trades in your portfolio, your custodian(s) will send you trade confirmations. Depending on your preferences, this will be by email or physical mail.
According to stock exchange rules, your cash becomes available (the trade “settles”) 3 days after the trade occurs. (In a pinch, we can move faster if absolutely necessary. We can request “same day settlement.” Some custodians charge extra for this service.) Cash raised from the sale of mutual funds may be available after only one day.
Our Office Administrator will be notified once trades settle and can start to transfer your cash to you. Once you have returned any necessary paperwork to Sensible Financial, we can complete the transfer by moving money to your bank account electronically. Alternatively, you can write a check on your account. Our Office Administrator will send you an email to let you know the transfer has begun. It takes one day for the transfer to complete. Once the money has been moved, we resolve the case.
Whew! That’s a lot of steps. But every step is important. We do a lot of checking to be sure we do what you want, and that your money is secure all along the way. Your custodian has also built security into every step they carry out for you. And, when you think about it, it’s actually pretty amazing. We are turning your investment holdings, which may number thousands of stocks or bonds (held in a small number of mutual funds), into cash in a matter of a few days. If you’d like to know more about the process, just ask your advisor – they’ll be happy to elaborate.