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A Review of Passiv – A Modern Portfolio Management Website

In this article, I provide a review of Passiv. Note that I want to disclose that I am an Affiliate of Passiv. I provide affiliate links to Passiv in this post, meaning that I earn a commission for any purchases that you make at the Affiliates’ website through these links. This will not incur additional costs for you. Please read my disclosure for more information.

Review of Passiv – What is Passiv?

Passiv is a modern portfolio management tool for do-it-yourself or DIY investors. The site was founded and operated by Brendan Lee Young, the CEO, and Brendan Wood, the CTO. Dividend Power talked with Brendan, the CEO, for over an hour about Passiv. I liked his enthusiasm about Passiv and his vision for helping investors. Their mission is to:

To make passive investing simple for everyday investors who want to save money and time.

So now, let’s start this review of Passiv.

Passiv
Passiv

How Did Passiv Start?

Passiv was born from frustration. Most DIY investors know what I am talking about. The frustration of using too many spreadsheets to track trades, dividends, asset allocation, and then manually make trades. The founders ditched the spreadsheets and created a website tool to help DIY investors. Passiv was launched in 2017 from their basement in New Brunswick, Canada.

Passiv interacts with your online broker to maintain a target portfolio allocation. Passiv is not a robo advisor, nor is it a financial advisor. It does not try to beat the market for you. Instead, it lets you manage your portfolio in a modern way and avoid using spreadsheets. This enables you to focus on managing your wealth rather than copying and pasting formulas and making manual trades. Today, Passiv has over 14,000 accounts, with about $1 billion in assets managed by DIY investors (as of April 2021). Now let’s take a deep dive and review basic facts of Passiv before weI discuss how Passiv works.

Review of Passiv – Facts About Passiv

Free User and Elite Member

Passiv follows a freemium model. First, there is a free version that is called the Community User. Passiv states that it is free forever. A Free user gets the following capabilities:

  • Automated calculations
  • Cash & dividend notifications
  • Keeping stock picks separate
  • Multi-account portfolios
  • Connecting multiple brokerages

But like anything else, you need to pay for the Elite Member version to get the most advanced features. Elite Member is $99 per year. However, it is discounted by $20 through Dividend Power for a price of $79. Please click here. The Elite version lets you perform everything in the Community User account and then adds:

  • One-click trades
  • Advanced currency handling by altering the calculated trades
  • Create tax-efficient portfolios

Review of Passiv – Brokerage Availability

Passiv is currently available at seven online brokerages in the U.S. and Canada, including ally invest, Alpaca, TD Ameritrade, Interactive Brokers, tradier, Questrade, Unocoin, and Zerodha. Passiv also connects to Wealthica, an investment and net worth tracking app, that permits connection to 100+ financial institutions. Passiv is planning on rolling out more brokerages connections in the future.

Next, Passiv permits you to connect to Kraken, Unocoin, and Bitbuy, crypto exchanges. Passiv is working on adding more crypto exchanges in the future.

Review of Passiv - Brokerages
Source: Passiv

Passiv lets you buy and sell stocks and exchange-traded funds (ETFs). Passiv works in both USD and CAD and other currencies and can handle all currencies at the same time. Passiv is planning on rolling out the ability to manually enter stock or ETF positions later this year.

Review of Passiv – How Does Passiv Work?

Now for this review, let’s discuss how Passiv works.

Consolidate Accounts

Passiv works by interacting with your brokerage account or multiple brokerage accounts in one convenient place. In this way, it works to consolidate all your accounts in one dashboard. This is convenient if you use multiple brokerage accounts to trade. In addition, you can enable the level of access for each brokerage account.

However, Passiv does not replace your brokerage accounts. Instead, Passiv enhances the functionality of your brokerage accounts. Passiv bills itself as “Autopilot for your Portfolio.” Passiv can turn your brokerage account or multiple accounts into a modern portfolio management tool from this perspective.

Essentially, you can build your personalized fund with target allocations and rebalance holdings with a click of a button to meet your target allocation. Passiv does the calculations for rebalancing for you.

Target Portfolio Allocation and Model Portfolios

Passiv is several tools in one from one convenient dashboard. First, it maintains your target portfolio allocation that you set up using Model Portfolios. You have two options. First, you can import your existing portfolio and set it as the Model Portfolio with the current weighting for each stock and ETF. Alternatively, you can set up a new Model Portfolio from scratch. You can then apply this Model Portfolio as that target allocation to an existing real-world portfolio.

A single Model Portfolio can be applied to multiple real-world portfolios. You can also switch between different Model Portfolios to evaluate changes and save time. Lastly, you can share your Model Portfolio with your friends or others.

The Model Portfolio can be comprised of individual securities or asset classes. Asset Classes lets you group equities with similar characteristics. The group of securities counts toward the same target allocation—for example, VFV.TO and VOO both track the US SP500 index, so you might want to place them in the same “S&P 500” asset class. The Asset Class feature lets you prioritize which accounts hold certain asset classes and prevents asset classes from being bought in a specific account.

Passiv tracks your asset allocation and notifies you when it deviates from it based on your target allocation alert threshold. Passiv uses a metric called “Accuracy.” In the example below, Portfolio A has only a 97% accuracy, Portfolio B has a 99% accuracy, and Portfolio C has a 91% accuracy. So, if your threshold is 2%, then Portfolios A and C need to be rebalanced. You can do this periodically, such as monthly, quarterly, or annually.

Rebalancing

Passiv does that hard work for you. Let us assume that you are rebalancing monthly. You have a fixed amount of cash being deposited into your brokerage each month; Passiv determines the trades needed to rebalance to meet your target allocation. The nice part is that Passiv automates your investing and can execute trades with one click if you are an Elite member.

In the example below, Passiv says that you need to buy four shares of Vanguard FTSE Canada All Cap Idx ETF to rebalance Portfolio A. In the example below, you would click the “Prepare Orders” button, and Passiv executes the trades for you after you provide confirmation.

By default, Passiv allocates new cash to your underweight targets and does not sell overweight assets. This method means that Passiv will only show BUY orders in the trade calculations. However, you can manually change the setting to show SELL orders if you desire.

Let’s take a look at another straightforward example. Suppose you have a portfolio with Coca-Cola (KO) and Pepsi (PEP), and you want to keep these at a 50:50 ratio in your portfolio. Market action causes Pepsi’s stock price to rise while Coke’s stock price declines. Pepsi is now at 60% and Coke at 40% of your portfolio at the end of the quarter. If you want to maintain a 50:50 ratio, you need to buy more Coke stock with your cash on hand. Passiv will do the calculations to determine the number of shares you need to buy to return to a 50:50 asset allocation. We can replace Coke and Pepsi with ETFs or increase the number of stocks or ETFs, and the underlying principle is the same.

Next, Passiv tracks your dividend payments, contributions, and total value. Passiv also provides alert notifications. You can set financial notifications such as when new cash is deposited into your account or your asset allocation drifts outside of your threshold.

From this perspective, Passiv simplifies the task for DIY investors. Remember all those spreadsheets that we just talked about? Well, Passiv is a suitable replacement.

Cash Management Rules

Passiv has some other tools that are also helpful. The first tool includes cash management rules. It is useful if you own bath US and Canadian stocks and manage your USD and CAD separately.

It is possible to pre-authorize deposits into your brokerage account. Passiv will notify you of deposits. By default, Passiv wants you to be 100% invested when you rebalance and invest. However, you can implement some cash management rules to retain a minimum amount of cash or allocate a maximum amount of cash. You can then dollar-cost average or DCA your money or save money for a future purpose. Passiv has a helpful tutorial about implementing this feature.

Multi-Account Portfolios

Another helpful feature is you can create multi-account portfolios. In this way, you can manage your retirement accounts in one portfolio and your non-retirement accounts in another portfolio or even combine all accounts into one portfolio. Additionally, it is possible to split your tax-advantaged and taxable accounts.

You can even exclude stock from a portfolio if you have a dividend growth portfolio and an investment in a non-dividend stock, e.g., Amazon. You can leave Amazon out of your rebalancing calculations for your target asset allocation.

Goal Setting and Tracking

Passiv also lets you set up and track goals. These can be goals as diverse as saving for your children’s education or investing for retirement. You can name the goal, e.g., Children College Fund, set the dollar target value, and when the month and year you desire to reach it. Passiv will automatically calculate how much you need to contribute each month based on the expected annual return. You can adjust the contribution frequency, expected return, and target date. The feature is helpful to help you plan and then track your goal. For example, you can determine if a specific dollar value for a monthly or quarterly contribution is something you can afford and adjust it from there.

Performance Reporting

Passiv lets you track the performance of your portfolio for 1-year, year-to-date, all-time or custom periods. There are options to include dividend information or not, show the total value and the rate of return (RoR), and showing contribution and withdrawal data.

What About Account Security?

What about security? Passiv communicates with your brokerage account through the brokerage’s official application programming interface or API in a secure way. The critical point here is that Passiv does not have your login credentials. Therefore, you remain in control and can revoke access either through Passiv or your brokerage account. You can check Passiv’s website for more information on how Passiv handles security and your data.

Review – What I Like About Passiv?

I hope that you have found this review of Passiv useful so far. In my opinion, Passiv is useful for beginners to more serious DIY investors. It provides functionality that is not readily available in most brokerage trading platforms. Further, if you have more than one brokerage account, such as one for tech stocks and one for dividend growth stocks, it gives you the ability to see both on one dashboard. Finally, it simplifies tasks that many of us are already doing with spreadsheets. I would instead focus on building wealth and other things than spreadsheets.

This blog is mostly about dividend growth investing. Passiv can fit the bill to manage your dividend growth portfolio. Maintaining a target allocation of stock holdings and periodically rebalancing when it deviates is a critical aspect of managing your portfolio. Passiv should allow you to be more organized and systematic in building your dividend growth portfolio. That’s a positive in my book.

However, the thing about Passiv is that it is not just about dividend growth; you can also manage your retirement accounts and more speculative tech stock portfolio (if you have one) all in one place. So, from this perspective, it supports DIY investors with a core portfolio in dividend growth investing who also have some investments in tech stocks in a different portfolio.

Passiv’s accuracy tracking takes the emotions out of investing. As you are all aware, emotions resulting from high volatility are often the most significant challenge investors face for underperformance. As a result, they usually sell or buy at precisely the wrong time. Passiv’s accuracy tracking and rebalancing features provide a systematic and organized way to periodically add stocks or ETFs to your portfolio. In my mind, this is a plus.

The path of a DIY investor takes time and effort. It is not for everyone. However, if this path works for you, Passiv may help you manage your portfolios and build wealth. Thanks for reading Dividend Power’s review of Passiv!

What is the Price of Passiv?

I hope that you found this review of Passiv helpful. If you are interested in subscribing to Passiv’s portfolio management tools, please click here. The link automatically includes a coupon code that reduces the price of Elite membership by $20 or about 20% only through Dividend Power. The regular price for Passiv Elite Membership is $99 per year, so the savings are substantial, and your price is approximately $79. In addition, they have a money-back guarantee, so there is no risk to you.


Review of Passiv
8.8 / 10 Reviewer
Pros

- Easy to use

- Low cost

- U.S., Canadian, and Indian brokerages and financial institutions

- One-click trades

- Portfolio rebalancing

- Goal setting

Cons

- Limited number of brokerages but growing

- No stock research

Summary
Passiv is a portfolio management tool that lets DIY investors see all their brokerage accounts in one convenient dashboard. Passiv makes goal setting, target asset allocation, and rebalancing relatively simple. It is for this reason that Passiv is good for DIY beginner to advanced investors. The price for Elite Membership is low at only $99 per year. It is $20 off through Dividend Power's affiliate link for only $79.
Ease of Use10
Portfolio Management9
Brokerage Availability8
Cost9
Value8

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