For nine years now, Acropolis has hired a third party to evaluate the market impact of our trading.
Whenever we talk to clients about rebalancing, tax-loss harvesting, raising cash for withdrawals, or putting new money to work, our traders work with the portfolio management teams to figure out what trades ought to occur and then the traders take those trades to market.
Last year, our traders went to market almost 23,000 times, trading $1.4 billion dollars of stocks and exchange traded fund (ETFs). Those numbers don’t even count mutual funds since those trade after hours.
As a firm, we’re responsible for getting our clients ‘best execution,’ which means the best price available in the market, and it’s the traders that do that work in the trenches.
The third-party firm evaluates whether we’re getting best execution, and for the ninth year in a row, we’ve received good results.
In 2023, the trade cost analysis showed that the market made $121,000 from our orders. That’s a lot of money in some ways, but it’s very little on $1.4 billion in trades. It amounts to 0.0086 percent, or less than one one-hundredth of a percent.
In addition to getting great execution, our traders do all of those orders with very few errors. Trading errors are part of doing business, and we track them arduously throughout the year in an effort to keep them to a minimum.
When we discover an error, it always gets resolved in the client’s favor. And, one of the primary rules for our traders is to let someone know that it’s happened immediately – the worst errors are the ones that don’t get resolved quickly.
Last year, I’m proud to say that there were only 43 errors, among the 23,000 trades that were done, making our error rate just 0.19 percent. And not all of those errors belong to the traders – sometimes the portfolio manager played a role.
Believe it or not, we’ve averaged 44 errors per year since we started tracking them in 2008. Although we didn’t track the number of trades that we did back then, we the whole firm was a lot smaller, which means that the percentage error rate is less today than it was 15 years ago – our traders are getting better and better.
So, please join me in a round of applause for the folks that do the vast majority of the trading: Minjung Son, Seongpil Hong, and Alex Umble.