FAQ

Frequently Asked Questions

Frequently Asked Questions

Frequently Asked Questions


A roboadvisor (roboadviser) is an online wealth management service that provides automated, algorithm-based portfolio management advice without the use of human financial planners. This reduces costs and emotional errors whilst trading investment and retirement accounts on auto-pilot.

Why spend all your spare time trading stocks? Hours of trading may be unsuitable and you may have to stay up long hours trading to achieve the desired result. Our computer algorithms never sleep and trade on your behalf without the interference of human emotion. This helps eliminate human trading errors and emotional trading mistakes and allows you to concentrate on your business or leisure time.

An exchange-traded fund (ETF) is an investment fund traded on stock exchanges, much like stocks. An ETF holds assets such as stocks, commodities, or bonds, and trades close to its net asset value over the course of the trading day. Most ETFs track an index, such as a stock index or bond index.

Choosing where to invest your money is a difficult decision and will depend on many factors, including your overall investment objectives, risk profile and the amount of time you have to invest. It's therefore best to seek the advice of a qualified financial adviser who can help define your personal situation and identify the appropriate asset allocation. But, if you do not have an adviser, our automated system will select the strategy for you based on your risk profile. Returns will be based on your risk profile. Click here to find out your risk tolerance and get a free "risk score" here.

Our investment strategies are selected after a rigorous testing process. We start by looking at the macro outlook for the year ahead and then select the appropriate ETFs. We usually have a "hedge" in place via US treasuries or government bonds for safety. Normally, when "risk on" assets such as equity ETFs or stock market instruments start to fall, investors seek safety in "risk off" assets such as bonds or treasuries. We then use momentum strategies to optimise the return to risk for any portfolio and carry out Monte Carlo simulations on "out of sample" data. Trades are automated, but the overall strategy is always overlooked by human asset managers for an extra layer of security & protection. As time goes on, we may adjust the strategy if we feel a new ETF or overlooked ETF will provide better returns to risk. This will be periodically.

The Money Pouch currently supports taxable investment accounts including individual, joint and trust accounts. We also support offshore QROPS and QNUPS pension trusts for British expats and offshore international retirement accounts for Americans living abroad. We also have trusts for Europeans, Australians, South Africans and many nationalities to reduce your tax burden and improve inheritance planning. Please contact us for more information.

Any national who is 18 years of age or over may open a Money Pouch account, except US residents. We only accept Americans who are permanently resident outside the USA. We do not accept green card holders or anyone resident in the USA. We do not accept anyone resident in the UK or Hong Kong or India. We do except British, American, Indian and HK expats who are resident outside of these countries. 

Anyone else worldwide can open up an account as long as you are not a resident in a black listed country such as North Korea or Nigeria. You can see a list of the available countries here.

Our account minimum is $10,000 which entitles you to invest in a diversified portfolio of low cost index funds (ETF's) which are rebalanced monthly automatically on your behalf by our trading algorithms.

Your assets are held in a brokerage account that The Money Pouch creates for you with Interactive Brokers. Interactive Brokers is a global brokerage firm based in the USA with equity capital in excess of $4.8bn. Interactive Brokers has the necessary technology expertise and security systems to support our investment approach. Your investments are held in a custody account opened in your name and secured with two-factor authentication. As both knowledge of your username/password and physical possession of a security device are required to login to your account, participation in the Secure Login System virtually eliminates the possibility of anyone other than you accessing your account. 

Yes, we encourage transfers from other brokerage accounts free of charge. We are able to transfer an outside brokerage account in its entirety and then it will be reinvested into your designated risk orientated portfolio. For retirement accounts which are transferable, we are then able to sell your transferred assets and invest you in the appropriate investment portfolio based on your risk preference.

Please contact us to get the process started. 

We highly recommend that you sell the following types of investments before you transfer your account to The Money Pouch because we are not able to transfer them:

  • Bonds
  • Penny Stocks
  • Annuities
  • Options
  • Futures
  • Mutual Funds (including index funds)
  • Other Exotic investments

We make use of Interactive Brokers' Reg T Portfolio Margin Account for the best investment returns to risk depending on risk profile.

Our conservative account is not leveraged. If you want to invest just the money you send in, please choose the conservative account. This strategy is the least exposed to volatile swings up and down. This is best suited for older clients or cautious investors

Our balanced and adventurous accounts employ “soft leverage”. Each account is leveraged at between 100% and 130%, dependent on market situation. So, for example, if you invest $100,000, we trade with $130,000 or 1.3 x your initial capital. This ensures higher profits at still tolerable risk. That's why we call it "soft leverage". Please note that your capital is at risk. Please click the following links to read more about margin accounts and leverage.

You can read more about margin accounts and leverage here.

 

Whilst we do not accept U.S. residents, we strive to comply with U.S. SEC regulations for all of our clients. This includes important disclosures to clients about our fees, business model, anti-money laundering, anti-terrorist financing and cybersecurity, which we take very seriously. On this site, under "Investment Strategies," you can find:

  • A statement that an algorithm is used to manage individual client accounts
  • A description of the algorithmic functions used to manage client accounts
  • A description of the assumptions and limitations of the algorithm used to manage client accounts
  • A description of the particular risks inherent in the use of an algorithm to manage client accounts
  • A description of any circumstances that might cause the robo-adviser to override the algorithm used to manage client accounts
  • A description of any involvement by a third party in the development, management, or ownership of the algorithm used to manage client accounts, including an explanation of any conflicts of interest such an arrangement may create
  • An explanation of any fees the client will be charged directly by the robo-adviser, and of any other costs that the client may bear either directly or indirectly
  • An explanation of the degree of human involvement in the oversight and management of individual client accounts - in this respect, we always have a human overseeing all accounts and making sure the algos are functioning and connected to the servers. If we find better, more intuitive algorithms that we believe may do the task better, than clients will be informed via the "push notifications" in our Android & iOS apps. We also have a mechanism to come completely out of the markets and sit in cash if markets drop 10% in a short period of time. This adds to client safety and we will also make sure they are suitably informed via the apps.
  • A description of how the robo-adviser uses the information gathered from a client to generate a recommended portfolio and any limitations - you can see the limitations under the "risk questionnaire". All client data is kept confidential, private and is never redistributed or shared with third parties other than Interactive Brokers.
  • An explanation of how and when a client should update information he or she has provided to the robo-adviser - clients should update their information if their circumstances change, e.g. change address, change jobs, become widowed, divorced, have children, etc.

Any financial advice is given by our partner firms and we don't take this task lightly. Partners are informed to obey SEC's requests below.

Provision of Suitable Advice

An investment adviser’s fiduciary duty includes an obligation to act in the best interests of its clients and to provide only suitable investment advice. Consistent with these obligations, an investment adviser must make a reasonable determination that the investment advice provided is suitable for the client based on the client’s financial situation and investment objectives.

You can read more about the SEC's guidance for roboadvisors here. You can also read the SEC's investor bulletin for roboadvisors. Which is a useful guide if you are not familiar with roboadvisors and their function.

If you already have an Interactive Brokers account, we can take over management of your account immediately. Please contact us today and we can have your account managed by us in no time. You just need to send us a signed, scanned one page PDF by email and we can have our trading algoritms take over and manage your account on auto pilot.


By using this website, you accept our Terms of Use and Privacy Policy. As with all investments your capital is at risk and the value of your investments as well as the income derived from them can rise as well as fall. Past performance is no guarantee of future results. Any historical returns, expected returns, or probability projections may not reflect actual future performance. Historical results do not include the transaction and management fees. All securities involve risk and may result in loss. This site is provided for information purposes only and is not intended as a recommendation or an offer or solicitation for the purchase or sale of any financial instruments. We do not provide financial advice to investors. Prospective investors should confer with their personal tax advisors regarding the tax consequences based on their particular circumstances. The Money Pouch assumes no responsibility for the tax consequences or returns for any investor of any transaction.