Dimensional Completes Conversion For ETF, What You Need To Know

This letter is to provide you with additional information regarding updates to the investments in your non-qualified accounts invested in the Portfolio Advisory Services (PAS) program.  Many of you have received communications directly from our investment partners at Dimensional Fund Advisors or Charles Schwab as custodian for the PAS program regarding a conversion of four of the mutual funds used in your non-qualified accounts to Exchange Traded Funds (ETF). We wanted to call out a few items related to ETF trading that will have an impact to your account.

• ETF Exchange fees – the exchange executing the trading of ETFs charge a small fee for executing sell trades. Purchasing or buy trades remain free. The fee is $5.10 per million of principal with a minimum of $.01. This fee is passed to you directly from our custodian, Charles Schwab. For example, if there is a sell of $500,000 of an ETF in your account, you will see a fee of $2.55 associated with that sell.  Again, this fee is coming directly from exchange processing the trade and is not being charged by Cetera Investment Advisers or your Financial Professional.
• Charles Schwab custodial fees – Asset Based Pricing (ABP) and Transaction Based Pricing (TBP) fees charged by Schwab custodial fees do not apply to ETF transactions. Whether your account is set up for Asset Based or Transaction Based Pricing, trades that are related to ETFs are not charged a fee. This means that if your account is Transaction Based Pricing (TBP), you will not be charged the standard fee of $9.95 for buys or sells of ETFs. Also, if your account is set up for Asset Based Pricing (ABP), ETF holdings are excluded from the calculation of the monthly Schwab fee. 
• ETF Trade settlement – Also related to ETF trading, the settlement time is different than trading mutual funds.  ETF trades settle T+2 just like equities. This is important when requesting a distribution from your non-qualified accounts, the mutual fund trades will settle T+1 but the ETF sells will settle T+2.  The final amount needing to be distributed from your accounts may need two settlement days before all cash available for distribution. 

If you have any questions, please contact our office.

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^{Asset allocation, which is driven by complex mathematical models, cannot eliminate the risk of fluctuating prices and uncertain returns. Asset allocation should not be confused with the much simpler concept of diversification.}

^{Additional risks are associated with international investing, such as currency fluctuations, political and economic stability, and differences in accounting standards.}

^{All investing involves risk, including the possible loss of principal. There is no assurance that any investment strategy will be successful.}

^{Investors should consider the investment objectives, risks and charges, and expenses of mutual funds carefully before investing. The prospectus, which contains this and other information about the funds, and can be obtained directly from the company or financial professional. The prospectus should be read carefully before investing or sending money.}