Acorns Advisers, LLC and Acorns Securities, LLC
Customer Relationship Summary (Form CRS)
May 4, 2021
Acorns Advisers, LLC (“Acorns Advisers”) is registered as an investment adviser with the Securities & Exchange Commission (“SEC”) and, its affiliate, Acorns Securities, LLC (“Acorns Securities”), collectively (“Acorns Securities and Advisers” or “Acorns”), is registered as a broker-dealer with the SEC and is a member of the Financial Industry Regulatory Authority, Inc.(“FINRA”). Acorns Securities is also a member of the Securities Investor Protection Corporation (“SIPC”).
This relationship summary is designed to provide you with a summary of Acorns Securities and Acorns Advisers offerings, business activities, and any disciplinary records. It includes information about fees, costs, and conflicts of interest, as well as legal disputes and more, as applicable. Free and simple tools are available to research firms and financial professionals at Investor.gov/CRS, which also provides educational materials about broker-dealers, investment advisers, and investing.
Acorns offers investment advisory services to only retail investors (“you”). You have the ability to invest in two separate portfolios composed of various Exchange Traded Funds (“ETFs”):
The Core Portfolios range from being Conservative to Aggressive, while the ESG Portfolios range from Moderately Conservative to Aggressive. Each portfolio has target allocations of various equity and/or fixed income exchange-traded funds (“ETFs”), depending upon the ETFs in the portfolio.
The ESG portfolio focuses on investing in ETFs which hold companies that reflect an MSCI ESG Rating which is designed to measure a company’s resilience to long-term, industry material environmental, social and governance ESG) risks. A rules-based methodology is used to identify industry leaders and laggards according to their exposure to ESG risks and how well they manage those risks relative to peers. We will recommend an Acorns Portfolio based on information that you give to us about yourself, including, among other things, your financial situation, and objectives.
Upon opening an account, you will be prompted to select whether you wish to invest in the ESG or Core portfolio. We will not provide any investment opportunities other than the two aforementioned Acorns’ portfolios and do not permit investment in both portfolios at the same time.
Your portfolio will be managed by Acorns Advisers, an investment adviser, in accordance with the Acorns Portfolio that you select and/or we recommend to you. You will be required to deposit the funds that you would like to invest in an account with Acorns Securities, a broker. Acorns Advisers will use a software-based algorithm to place orders with Acorns Securities to buy, rebalance, and sell ETFs according to the target ETF allocations of your Acorns Portfolio. By combining the brokerage services offered by Acorns Securities and the advisory services offered by Acorns Advisers, we aim to simplify the investment process for you.
You have the option to open with Acorns Securities a standard investment account (“Acorns Invest”), an individual retirement account (“Acorns Later”) and/or a Uniform Transfer to Minors Act/Uniform Gift to Minors Act investment account (“Acorns Early”). The minimum amount you are required to invest in each such account is $5.00.
As part of our relationship, you will grant Acorns Advisers discretion to buy and sell investments on your behalf in your account(s) without asking you in advance. Acorns Advisers will monitor and rebalance your account(s) on a periodic basis. As explained in greater detail in the Acorns Brochure of Acorns Advisers, Acorns will provide you with the ability to impose certain reasonable management restrictions on your portfolio by excluding one (or in certain cases more) of the ETFs that are part of an Acorns Portfolio.
Our parent company, Acorns Grow, Inc., together with its subsidiaries, offers a range of other products as part of our platform including Acorns Spend (“Acorns Spend”), which is a checking account offered through our partner bank, Lincoln Savings Bank, and Acorns Protect (“Acorns Protect”), which allows users to purchase certain insurance products. These services are described in greater detail on our website: www.acorns.com.
· Given my financial situation, should I choose an investment advisory service? Should I choose a brokerage service? Should I choose both types of services? Why or why not?
· How will you choose investments to recommend to me?
· What is your relevant experience, including your licenses, education and other qualifications? What do these qualifications mean?
Detailed information about our advisory services can be found in our Firm Brochure.
What fees will I pay?
· We will charge you a flat monthly fee in connection with our services irrespective of the size of your investments with us. This fee is known as a “wrap fee” and covers the services of both Acorns Advisers and Acorns Securities. We will not charge you a separate transaction-based fee when Acorns Securities facilitates an investment by you in an ETF. If you have $1,000,000 or more invested with us, we will also charge you an asset-based fee in connection with the investment advisory services provided to you by Acorns Advisers. For more information, please refer to our Program Agreement.
· We charge different tiers of flat monthly fees based on the types of accounts and other services that you subscribe to with us. Our first fee tier, “Acorns Lite”, gives you access to an Acorns Invest account. Our second fee tier, “Acorns Personal”, gives you access to an Acorns Invest account, an Acorns Later account and an Acorns Spend account. Our third fee tier, “Acorns Family”, gives you access to an Acorns Invest account, an Acorns Later account, an Acorns Early account and an Acorns Spend account. Each fee tier offers access to Acorns Protect and to certain financial wellness and education materials. You can find detailed information about our different fee tiers on our website: www.acorns.com/pricing. Our tiered fee structure gives us an incentive to encourage you to open more accounts with us and use more of our services.
· Help me understand how these fees and costs might affect my investments. If I give you $1,000 to invest, how much will go to fees and costs, and how much will be invested for me?
You will pay fees and costs whether you make or lose money on your investments. Fees and costs will reduce any amount of money you make on your investments over time. Please make sure you understand what fees and costs you are paying.
What are your legal obligations to me when providing recommendations as my broker-dealer or when acting as my investment adviser? How else does your firm make money and what conflicts of interest do you have?
· Due to the limited role of Acorns Securities described above, we will not provide recommendations as your broker-dealer. Rather, Acorns Advisers will act as your investment adviser and must act in your best interest and not put our interests ahead of yours. At the same time, the way we make money creates some conflicts with your interest. You should understand these conflicts and ask us about them because they can affect the services and investment advice we provide you. Here are some examples to help you understand what this means:
· As described in the “What fees will I pay?” section above, our tiered fee structure gives us an incentive to encourage you to open more accounts with us and use more of our services.
· Additionally, when placing orders for various customers across portfolios, it may be necessary from time to time to aggregate orders, such as to achieve round lots, in such cases, some of the orders aggregated may include accounts in which we, our employees and/or principals have an economic interest, and it is possible that some orders receive better execution than others.
· How might your conflicts of interest affect me, and how will you address them?
How do your financial professionals make money?
· Our financial professionals are only paid flat salaries and do not have a variable component to their compensation. Accordingly, our financial professionals do not have conflicts of interest with you based on their compensation structure such as financial professionals at other brokers or advisers who have a variable component of their compensation based directly or indirectly on the fees paid by you may have.
Do you or your financial professionals have legal or disciplinary history?
· No. A free and simple search tool to research us and our financial professionals can be found at Investor.gov/CRS.
· As a financial professional, do you have any disciplinary history? For what type of conduct?
For additional information about our services, you should visit www.acorns.com. You can request an up-to-date information or a copy of this relationship summary by calling (855) 739.2859 or emailing firstname.lastname@example.org.
· Who is my primary contact person? Is he or she a representative of an investment adviser or a broker-dealer? Who can I talk to if I have concerns about how this person is treating me?