Description of Advisory Business and Services Offered Acorns is an Investment Adviser, registered with the SEC under the Investment Advisers Act of 1940, providing roboadviser services to its clients through a Wrap Fee Program This Brochure describes the Wrap Fee Program offered by Acorns that bundles or “wraps'' discretionary and non-discretionary investment advisory services, brokerage, custody, clearing and settlement, as well as other administrative services together and charges a single inclusive advisory fee.
Investment opportunities provided by Acorns are designed to encourage automated investments in non-retirement and retirement products, but Acorns does not provide overall financial planning, tax, accounting or legal advice. Acorns’ investment advisory services are provided principally through Acorns’ mobile application and web-based application (together, the “Acorns App”).
Acorns offers the following investment accounts (“Acorns Account(s)”): (1) Traditional individual investment accounts (“Acorns Invest Account”) (2) Individual Retirement Accounts, often referred to as “IRAs” (“Acorns Later Account”), and (3) UGMA/UTMA investment accounts for the benefit of minors (“Acorns Early Account”) ETF Model Portfolios The primary service Acorns provides to investors is investment advice through model portfolios comprised of Exchange Traded Funds (“ETFs”). Acorns’ model portfolios reflect target asset allocations across various asset classes, for example stocks (equities) and bonds (fixed income).
The ETFs within the model portfolios are managed by independent third-party Investment Advisers. Acorns currently offers five (5) model portfolios reflecting investment outlooks and risk tolerances ranging from ‘conservative’ to ‘aggressive’ in the “Core Portfolio” and four (4) model portfolios in the “Environmental, Social and (Corporate) Governance (“ESG”) Portfolio” (there is no “conservative” portfolio available in the ESG Portfolios). Acorns designs the portfolios and manages their target asset allocations utilizing strategies based on modern portfolio theory. Acorns uses a proprietary computer software-based algorithm to match each client’s Acorns Account(s) to the portfolio best suited to the client’s investment goals based on an investor profile (as described below) that each client creates and maintains through the Acorns App.
Acorns’ software-based algorithm determines a client’s initial portfolio by selecting the best suited portfolio based on a client’s investor profile questionnaire, which incorporates a client’s financial situation, investment horizon, and risk profile, among other factors. A client can choose to override such algorithmic determination by selecting a different portfolio. Acorns reviews and evaluates portfolio allocation determinations periodically in line with material updates to a client’s investor profile. As a result, Acorns recommends that clients ensure their financial condition, risk tolerance and investment goals are kept current in their investor profile on the Acorns App.
With respect to the Acorns Early accounts, Acorns utilizes the “aggressive” Portfolio for all Acorns Early accounts based on the age of the beneficiaries.
To align the target asset allocation of an Acorns Account with the portfolio selected by Acorns based upon the client’s investor profile, Acorns purchases ETFs through its affiliate Broker Dealer, Acorns Securities, LLC. As clients make further deposits into, or withdrawals from, their Acorns Accounts, the corresponding transactions made by Acorns are designed to rebalance the account toward the target allocation of the relevant Portfolio. Upon a client’s request to withdraw cash from an Acorns Account, sales of the ETFs underlying such client’s portfolio are initiated in a manner designed to maintain the target allocation of the relevant portfolio. Acorns will initiate a rebalancing if an Acorns Account’s holdings deviate significantly (i.e., by 5% or more) from the applicable portfolio’s target allocation. In this way, Acorns seeks to maintain the client’s target asset allocation through market fluctuation, withdrawals, deposits, and other events that could cause deviations, while seeking to minimize the transaction costs of frequent portfolio rebalancing. Rebalancing transactions are automatic, as are dividend reinvestments.
The rebalancing and reinvestment processes are automated. As a result, Acorns will sell over concentrated ETFs and use the proceeds to buy under concentrated ETFs to better reflect target allocations regardless of market or other dynamics. The risks and limitations of the automated process could result in the continued purchase of underperforming ETFs and the sale of better performing ETFs to achieve the targeted allocation. All transaction specific costs are covered under the subscription fee paid by the client, and the client incurs no additional transactional costs or fees. In some market conditions, this creates capital gains and potentially other tax liabilities. Any costs imposed by the manager of the ETF would be expressed through the pricing of the ETF.
Acorns designed the selection and relative weighting of the ETFs in each of the portfolios to pursue specific investment objectives, including diversification. Removing an ETF from any of the portfolios will change the weightings of the ETFs in the resulting altered portfolio, in a way that deviates from Acorns’ investment advice and may impact performance.
Notwithstanding the foregoing, clients can request to impose certain limited management restrictions on their account, which are implemented at the discretion of Acorns, by excluding an ETF that would otherwise be included in a portfolio. Due to the relatively small number of ETFs in each of the Portfolios, the exclusion of an ETF will alter the composition and risk level of a portfolio, additionally, it shall prevent a client from accessing the Acorns App due to the deviation from a programmed portfolio. If an ETF is excluded from a portfolio, allocations to the remaining ETFs in the portfolio will be made in the same relative proportions. Excluding an ETF from a portfolio may impact the performance of the portfolio, and the modified portfolio may not be suitable with respect to a client’s stated investment objectives, risk tolerance, financial condition or other facts and circumstances. Prior to making an exclusion or other modification request, clients should carefully review and analyze all pertinent information about the portfolios available on the Acorns website or through the Acorns App, including the impact the removal of an ETF could have on how the modified portfolio aligns with their investment goals and risk tolerance. Clients can request reasonable restrictions on the management of their Acorns Account or request to modify existing restrictions by calling (855) 739-2859 or emailing [email protected]. Bitcoin-linked ETF In addition to the model portfolios described above, a client can elect to allocate a portion of their Acorns Invest Account into a bitcoin-linked ETF. Acorns has developed allocation limits for the bitcoin-linked ETF based on a client’s investment outlook and risk tolerance, in the amounts set forth below: Investor ProfileMaximum Percentage of Acorns Invest Account Allocable to Bitcoin-linked ETF Conservative1% Moderately Conservative2% Moderate3% Moderately Aggressive4% Aggressive5% Custom Portfolios In addition to the ETF model portfolios and bitcoin-linked ETF described above, certain clients can affirmatively elect to allocate a portion of their Acorns Invest Account into a Custom Portfolio. An Acorns Custom Portfolio is a non-discretionary investment advisory account that allows clients to invest a portion of their overall Acorns Invest Account in fractional shares of equity securities. In a client’s Custom Portfolio, the client is ultimately responsible for choosing which securities to invest in, when to invest and sell them, and how much to allocate to each investment. Clients with Custom Portfolios are limited to the securities made available to them through the Acorns App. Acorns has developed allocation limits on Custom Portfolios based on a client’s investment outlook and risk tolerance, in the amounts set forth below: Investor ProfileMaximum Percentage of Acorns Invest Account Allocable to Custom Portfolio Conservative10% Moderately Conservative20% Moderate30% Moderately Aggressive40% Aggressive50% Subject to the allocation limits above, clients can implement investment decisions and/or investment strategies within a Custom Portfolio that do not coincide with their investor profile.
While clients can choose to pursue investment strategies with their Custom Portfolios that are outside the scope of the investor profile, each client is solely responsible for any decision to invest in the Custom Portfolio and should carefully review, and consider the information available on the Acorns App regarding each investment, as well as any applicable public company filing or report, before making any investment decision.
A client’s Custom Portfolios can be concentrated to as few as one security. Therefore, Custom Portfolios add additional security-specific concentration risk. For example, equities may decline in value due to both real and perceived general market, economic and industry conditions. A security issued by a particular issuer may be impacted by factors that are unique to that issuer and thus may cause that security’s return to differ from that of the market. Concentration of investments in a relatively small number of securities, sectors or industries, or geographical regions may significantly affect performance. In addition, the value of accounts may vary considerably in response to changes in the market value of individual securities, industries or sectors and lead to higher volatility. Custom Portfolios may be removed by a client at any time.
It is important to note that Custom Portfolios are not instant trading and are not intended for investors seeking to engage in frequent trading. The list of securities is exhaustive of those offered in the program and have not been limited, listed, ordered or presented in any fashion as having been made with your risk tolerance and objectives in mind. Nothing about the selection of securities being provided should be construed as advice or a recommendation of an investment strategy. Acorns may add, remove, re-categorize or replace the available investments. In the event an investment is removed, it will no longer be available for additional investing.
This information provided herein regarding the investment advisory services provided by Acorns is qualified in its entirety by reference to the Acorns Advisory Agreement and the Acorns Grow Program Agreement.
Assets Under Management As of December 31, 2022, Acorns’ total Assets Under Management (“AUM”) are approximately $6,295,054,328.
Compensation for Advisory Services & Wrap Fees Acorns’ clients pay a monthly subscription fee (“Subscription Fee”) to Acorns Grow Incorporated (“Acorns Grow”), the parent company of Acorns, for access to the Acorns Grow platform. The Subscription Fee represents the total fee that clients pay each month1. It is composed of the “Acorns Advisory Fee” and the “Acorns Grow Program Fee”. The

Acorns Grow Program Fee is assessed for clients’ overall access to the Acorns Financial Wellness System, including but not limited to, financial education information and the Acorns Earn 1Subscription Fees are assessed and charged monthly on the Fee Date. The Fee Date refers to the Business Day each month when the applicable Subscription Fee for that calendar month will be withdrawn from the client’s funding source. The Fee Date is the monthly anniversary of the date a client’s first Acorns Account was verified (“Verified Date”). If the Verified Date falls on a day that is not a business day month, the Fee Date for that month will be on the next preceding business day. If the Fee Date would fall on a day in the prior month (for example, due to weekends or holidays) the Fee Date is the first business day of the following calendar month. To the extent clients do not have sufficient funds in their funding source to cover the Subscription Fee, Acorns will sell shares in such client’s Acorns Account to pay such Subscription Fee. Program. The program may cost a client less than purchasing brokerage and advisory services separately. However, the use of Custom Portfolios to trade individual equity securities may cost more than the use of a brokerage account to engage in such trading.
The Subscription Fee is collected by Acorns Grow, after which the portion allocable to Acorns (namely, the Acorns Advisory Fee) is paid out from the total Subscription Fee. The Acorns Advisory Fee covers investment advisory services provided to clients across all applicable Acorns Accounts, which may include Acorns Invest, Acorns Later and/or Acorns Early Accounts. The Acorns Advisory Fee also covers the costs of trade execution, clearance, custody, account reporting, and, if applicable, the services of the IRA Custodian and Administrator.
Subscription Fees and their component fees are not negotiable. The amount of the Subscription Fee depends on the Subscription Tier in which a client is enrolled/subscribed, as further described below.
Fee Schedule2 Acorns currently offers three tiers of Subscription Fees, all of which include the Acorns Grow Program Fee and the Acorns Advisory Fee.3Acorns Personal, a $3 monthly Subscription Fee Tier, includes an Acorns Invest Account (Base Portfolio only), one or more Acorns Later accounts, and access to Acorns Checking. Included in this monthly subscription fee is a $0.10 Acorns Advisory Fee and the Acorns Grow Program Fee of $2.90. Acorns Personal Plus, a $5 monthly Subscription Fee Tier, includes Acorns Invest Accounts (Base and Custom Portfolios), one or more Acorns Later Accounts, access to Acorns Checking, and access to additional non-advisory services, such as premium educational content. Included in this monthly Subscription Fee is a $0.10 Acorns Advisory Fee and the Acorns Grow Program Fee of $4.90.4 Acorns Premium, a $9 monthly Subscription Fee Tier, includes Acorns Invest Accounts (Base and Custom Portfolios), one or more Acorns Later Accounts, one or more Acorns Early Accounts, access to Acorns Checking, and access to additional non-advisory services, such as premium educational content and the Acorns Benefits Hub. Included in the Subscription Fee is a $0.10 Acorns Advisory Fee and the Acorns Grow Program Fee of $8.90. In addition to investment services, each Subscription Fee Tier provides clients access to financial wellness and educational materials provided by Acorns Grow.
Acorns changes its subscription fee tiers from time to time, and, as a result, some clients are subject to legacy fee schedules which may be higher or lower than the current fee schedules described above. Current clients should refer to the Program Agreement entered into with Acorns at the time of account opening or client-initiated subscription fee tier change.
4Acorns began offering the Subscription Fee Tiers described here to a limited number of new clients beginning on 1/24/2023. As part of this update, new Acorns clients may be offered an Acorns Early Account as part of the Personal Plus Tier and/or may also not see the Acorns Premium Tier as an available Subscription Fee Tier at registration until these updated Subscription Fee Tiers are available to all new clients and across all platforms. A client should refer to documents provided at account opening for more detail on the client’s Subscription Fee Tier and the services provided to the client under that tier. 3Acorns does not charge the Acorns Advisory Fee for accounts with a $0.00 balance, and instead reallocates that fee to the Acorns Grow Program Fee. 2Acorns reserves the right to waive or reduce the Subscription Fee at any time, for any period, and for any client at its sole and absolute discretion. If your Combined Monthly Balance on the Fee Date is $1,000,000 or more and you do not have an Acorns Checking Account, $100 per $1,000,000 of Combined Monthly Balance on the Fee Date (for the avoidance of doubt, the Subscription Fee in that scenario will be one hundredth of one percent (.01%) of the number obtained by rounding your Combined Monthly Balance down to the nearest whole multiple of $1,000,000).
If your Combined Monthly Balance on the Fee Date is $1,000,000 or more and you have an Acorns Early Account, Acorns Checking Account, $100 per $1,000,000 of Combined Monthly Balance on the Fee Date (for the avoidance of doubt, the Subscription Fee in that scenario will be one hundredth of one percent (.01%) of the number obtained by rounding your Combined Monthly Balance down to the nearest whole multiple of $1,000,000) plus $5.
Clients should be aware that Acorns is designed for individuals who make frequent recurring investments. The Fee Schedule is not appropriate for individuals looking to make few or infrequent small-dollar investments.
The Subscription Fee is charged monthly and paid by a recurring monthly ACH debit and electronic funds transfer that deducts money from each client’s linked checking account.
Pursuant to the Acorns Program Agreement, to the extent clients do not have sufficient funds in their funding source to cover the Subscription Fee, or have broken the link to their funding source, Acorns reserves the right to sell shares in such client’s Acorns Account to pay such Subscription Fee.
Clients are charged a single monthly wrap fee and all transaction costs are paid by Acorns from the proceeds of the collective Acorns Advisory Fees. The advisory and other services that are reflected in the Subscription Fee may exceed the costs of similar services purchased separately.
Additional Fees ETFs charge fees to cover the costs of managing the underlying ETF in the form of an expense ratio. These fees typically cover the ETF’s operating expenses, management fees, marketing costs, custodial fees, etc. These fees are entirely separate and distinct from the Subscription Fees paid to Acorns for its wrap fee program. The expense ratio of each ETF included in the portfolios is outlined in the respective ETF prospectus.
Although Acorns reserves the right to waive or reduce any Subscription Fees or Acorns Advisory Fees associated with an Acorns Account at its sole discretion, Acorns is unable to waive fees associated with the expense ratios of the ETFs comprising the portfolios. Acorns does not charge performance fees.
Certain additional fees are charged to a client for specifically requested services or irregular occurrences (for example, manual rollovers, outgoing asset transfers, and in-kind withdrawals).
Compensation for Recommendations Acorns enters into arrangements with affiliate partners who, for compensation, will refer prospective clients to Acorns. Each such arrangement is governed by a written agreement between Acorns and the affiliate partner and will be disclosed to the prospective client, as required by law. The terms for each affiliate partner are located on the affiliate partner’s landing page. Acorns does not pay any compensation to another advisor if the advisor refers prospective clients to Acorns.
Additionally, Acorns pays referral fees to existing clients in connection with client referrals of new clients (the “Referral Program”). For additional information on the Referral Program, please see the summary of the Referral Program Agreement under Item 9 or the full agreement via the Acorns website:https://www.acorns.com/referral-agreement/.Acorns does not compensate salespersons or enter into professional solicitation service agreements.
Brokerage Practices Acorns places all brokerage orders through its affiliated broker, Acorns Securities, LLC (“Acorns Securities”), to buy, rebalance, and sell as necessary to maintain the asset allocation of the portfolio that Acorns has selected for each Acorns Account, or in cases where the client has decided to forgo Acorns’ recommendation and select its own portfolio, the client’s selected portfolio. By bundling brokerage services through Acorns Securities with advisory services through Acorns, Acorns believes that it simplifies the investment process for its clients.
Acorns Securities provides confirmations and statements to Acorns clients. Acorns Securities utilizes RBC Capital Markets, LLC as custodian to hold clients’ funds and ETF shares in safekeeping and as clearing broker to execute, clear, and settle ETF trades on an omnibus basis.
In addition, Acorns Securities utilizes Drivewealth, LLC as custodian to hold clients’ funds and non-ETF shares in safekeeping and as clearing broker to execute, clear, and settle non-ETF trades on an omnibus basis for Custom Portfolios. Acorns utilizes Forge Trust to serve as custodian and administrator of Acorns Later Accounts.
Since Acorns Securities serves as the broker for all Acorns Accounts, clients may benefit from savings on execution costs that would not be available without volume trading discounts or batched orders. Additionally, there are instances where aggregating orders will be the only means of creating an order that is in whole shares. However, Acorns realizes that conflicts of interest exist with respect to aggregating orders of various client types, such as individuals, as well as aggregating client orders with the orders on behalf of accounts advised by Acorns in which, we, our employees and/or principals have an economic interest.
To mitigate any such conflicts of interest, all clients participating in the aggregated order receive an average share price with all other transaction costs shared on a pro-rata basis.
Additionally, each client that participates in an aggregated order will participate at the average share price for all Acorns transactions in that security on a given business day. Acorns will aggregate transactions consistent with its duty to seek best execution and consistent with the terms of the Acorns Program Agreement. Under no circumstances will an advisory client be favored over any other advisory client. Any request to obtain information on the average share price should be directed to (855) 739-2859 or via email at[email protected]. The firm does not engage in activities involving “soft dollars.”