Advertiser Disclosure

Investing

Review of 1919 Investment Counsel

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone and is not intended to be a source of investment advice. It may not have not been reviewed, commissioned or otherwise endorsed by any of our network partners or the Investment company.

Written By

Reviewed By

1919 Investment Counsel LLC provides portfolio management, financial planning and other services to individuals and families, as well as institutions. The firm’s team of roughly 125 employees is spread across 10 offices. The group was part of Legg Mason, Inc. until 2014, when it was acquired by the financial services company Stifel Financial Corp. and rebranded as 1919 Investment Counsel. The firm currently oversees $15 billion in assets under management (AUM).

All information included in this profile is accurate as of September 11, 2020. For more information, please consult 1919 Investment Counsel’s website.

Assets under management: $15,117,313,398
Minimum investment: Varies by account type
Fee structure: A percentage of AUM, fixed fees
Headquarters: One South Street, Suite 2500
Baltimore, Maryland 21202
1919ic.com
(410) 454-2171

Overview of 1919 Investment Counsel

1919 Investment Counsel LLC is the product of a series of mergers and acquisitions over many decades. Notably, in 2004, Legg Mason’s trust and investment subsidiary combined with Scudder Stevens & Clark, which at one time was the largest independent investment advisory firm in the country. Then, in 2014, the group, known as Legg Mason Investment Counsel, LLC, was sold to Stifel Financial Corp., a publicly-traded financial services holding firm with many brands under its umbrella. At that time, the group changed its name to 1919 Investment Counsel, reflecting Scudder’s roots in the investment industry dating back to 1919.

Today, the 1919 Investment Counsel team has about 50 employees in investment advisory and research roles. With headquarters in Baltimore, the firm has an additional nine offices in Birmingham, Alabama; Philadelphia; New York; Cincinnati; San Francisco; Houston; Dallas; and Vero Beach, Florida.

The group includes the Philadelphia-based unit Arthur Karafin Investment Advisors, which operates with different products and fee schedules.

What types of clients does 1919 Investment Counsel serve?

1919 Investment Counsel serves individuals and families as well as institutions and businesses. Nearly half of the firm’s individual clients are considered high net worth individuals, which the SEC defines as those with at least $750,000 in assets under management or a net worth of at least $1.5 million.

No across-the-board minimum exists to invest in mutual funds, or to access the firm’s portfolio management expertise through an outside firm offering wrap accounts, for which investment minimums vary by account type. To work directly with the firm and utilize some specific strategies, however, new clients are typically required to invest at least $2 million.

Rounding out the firm’s client list are charitable organizations, pension and profit-sharing plans, endowments, foundations, government-related entities, investment companies, corporations and individual retirement plans.

Services offered by 1919 Investment Counsel

Clients can expect to find portfolio management and financial planning services at 1919 Investment Counsel. Typically, clients hand over the day-to-day investment decision making to the team in what is known as a discretionary relationship. However, the firm does work with clients who want advice but prefer to make the final decisions themselves, known as a non-discretionary relationship.

The team also manages certain mutual funds available to the broader investing community. Wealthy families can also find family office services, including assistance with administrative tasks such as payroll management.

Here is a full list of services offered:

  • Investment advisory services (separately managed and wrap fee accounts; discretionary and non-discretionary)
  • Financial planning
    • Retirement planning
    • Trust and estate planning
    • Charitable planning
    • Tax planning
    • Cash flow forecasting
    • Long-term care planning
    • Risk management and insurance planning
  • Family office services

How 1919 Investment Counsel invests your money

All together, 1919 Investment Counsel offers more than a dozen investment strategies. Some strategies also include mutual funds and exchange-traded funds (ETFs) in addition to stocks or bonds.

For equity portfolios, the firm’s core competency is mid- and large-cap — primarily domestic — portfolios, which typically include 30 to 60 individual stocks. The firm generally favors companies of high or improving quality that have competitive advantages over their peers. An extensive four-step research process that employs both quantitative and qualitative analysis helps the firm narrow down its list of potential investment opportunities.

As for fixed income portfolios, the team tailors portfolios based on each client’s specific needs. This includes their tax status, income needs, time horizon, liquidity needs, quality constraints and any other special considerations.

To complement its strategies, 1919 Investment Counsel taps certain third-party managers for their expertise in specific asset classes or styles, including small-cap, alternative investments or real estate. Additionally, 1919 Investment Counsel offers socially responsible investing. There is a team of social research analysts who conduct their own research on social issues and domestic and international companies

Fees 1919 Investment Counsel charges for its services

For investment advisory services, clients should expect to pay a fee based on a percentage of their assets under management. In some cases, clients negotiate a fixed fee instead.

The standard fee schedule for 1919 Investment Counsel’s services is tiered, and varies by strategy. All fees and account minimums are negotiable, however.

Fee Schedule for Equity/Balanced Accounts
First $3 million 1.00%
Next $7 million 0.70%
Next $30 million 0.50%
$40 million and over 0.40%
Fee Schedule for Fixed Income Accounts
First $3 million 0.50%
Next $7 million 0.35%
Next $30 million 0.25%
$40 million and over 0.20%

When different types of assets are mixed in a single account, such as stocks and mutual funds, clients may negotiate separate rates for each asset class. Clients invested only in the mutual fund program pay 0.50% on all assets under management.

Keep in mind that clients typically also owe separate brokerage, trading and custodian fees, as well as any internal or sales fees for investment products like mutual funds, ETFs and annuities.  However, the rates above do typically cover financial planning as well, though sometimes clients may pay separately for these services based on the scope and timeframe of the financial planning project. The firm also may provide a la carte financial planning services to clients who are not already working with the firm.

Rather than hire the team directly, some clients access 1919 Investment Counsel’s services through third-party firms that can include wrap accounts, which bundle advisory fees with trading and custodian charges.

1919 Investment Counsel’s highlights

  • Custom accounts: The team offers a menu of investment strategies, but it works with clients with unique needs and guidelines to customize those strategies or even create new strategies. In addition, clients can place restrictions on the types of investments they want in their accounts.
  • Financial planning included: Typically, the annual asset-based fee charged by 1919 Investment Counsel covers both portfolio management and financial planning advice around topics such as retirement, executive compensation or estate and tax planning. Other firms may charge clients separately for these services.
  • Socially responsible investing options: 1919 Investment Counsel has a dedicated team to help clients invest in a manner that mirrors their values. For instance, the firm offers options to weed out companies that engage in objectionable activities, find companies taking steps to be environmentally friendly or diverse and invest directly in companies that have a positive social impact on society.
  • Clean disciplinary record: 1919 Investment Counsel does not have any disciplinary disclosures on its record. See more on this below.

1919 Investment Counsel’s downsides

  • High minimums for certain services: Although the firm works with many investors who do not meet the SEC definition of a high net worth individual, it requires that clients invest a minimum of $2 million to tap certain services including the equity, balanced and fixed income strategies.
  • Potential conflicts of interest: Portfolio managers at 1919 Investment Counsel may recommend that clients invest in funds managed by affiliates, in which case the firm’s parent company may earn more money than it would have had the client gone with an unaffiliated fund. This poses a potential conflict of interest, as the firm may be financially incentivized to make certain recommendations. (It is worth noting that the team will not charge account advisory fees on assets invested in funds managed directly by 1919 Investment Counsel.)
  • Limited geographic footprint: The firm has a presence in only nine cities nationwide, leaving most of the country without a local office. That being said, the firm is registered to serve clients in 48 states plus the District of Columbia if meeting with your advisor in-person isn’t a priority for you.
  • Pays for referrals: 1919 Investment Counsel pays 17 affiliated and unaffiliated firms — including its parent company Stifel as well as Schwab and Fidelity — anywhere from 20% to 50% of a client’s annual fee for referrals.

1919 Investment Counsel disciplinary disclosures

1919 Investment Counsel discloses no disciplinary events over the last 10 years, thus giving it a clean record. All registered investment advisory firms are required by the SEC to disclose any disciplinary actions from the last decade against the company or any of its affiliates or employees that would be material to a client when evaluating the firm or the integrity of the management team.

1919 Investment Counsel onboarding process

To reach out to 1919 Investment Counsel, potential clients can call the firm or fill out a form provided on its website, which requests basic contact information as well as the topic you’re interested in discussing and your preferred method of communication.

When setting up your account, ask the team how often to expect account reviews, since the frequency varies based on factors including account size, the type of investments and general macroeconomic factors. You can expect to receive account statements quarterly, directly from the account custodian.

Is 1919 Investment Counsel right for you?

Families looking for both investment advisory and financial planning services bundled together under one fee may consider 1919 Investment Counsel. In particular, wealthy clients with at least $2 million to invest may find attractive the firm’s family office services and willingness to customize accounts based on clients’ unique needs and preferences.

The firm’s limited geographic footprint means clients not located near one of the 10 offices may want to look elsewhere, especially if in-person meetings with your advisor are important to you.

As is always the case when choosing a financial advisor, make sure to ask the advisor questions. It is important to make sure you understand and are comfortable with its affiliations and potential financial incentives.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

magnifymoney

Connect with a Financial Advisor to Help You Grow & Protect Your Wealth

Find An Advisor
Terms & Conditions Apply.

Advertiser Disclosure

Investing

Review of WE Family Offices

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone and is not intended to be a source of investment advice. It may not have not been reviewed, commissioned or otherwise endorsed by any of our network partners or the Investment company.

Written By

Reviewed By

WE Family Offices is an independent registered investment advisor that caters to the wealthy. The firm’s team of nearly 50 employees provides investment advice, financial planning and family office services. The firm has locations in Miami and New York, although most of its clients live outside the United States. It currently has $8.8 billion in assets under management (AUM).

All information included in this profile is accurate as of September 11, 2020. For more information, please consult WE Family Offices’ website.

Assets under management: $8,834,748,220
Minimum investment: None specified but requires a minimum annual fee of $150,000
Fee structure: Fixed fees, a percentage of AUM, performance-based fees
Headquarters: 701 Brickell Avenue, Suite 2101
Miami, Florida 33131
wefamilyoffices.com
(305) 825-2225

Overview of WE Family Offices

WE is an abbreviation for Wealth Enterprise, stemming from the team’s belief that to successfully sustain and grow wealth over multiple generations, families must treat their finances as business enterprises.

The firm dates back to 2000, when it was founded by Santiago Ulloa under the name TBK Investments. Seven years later, a major bank holding company bought the group, and operated it under the GenSpring branding. In 2013, the executive management team took the firm back to its independent roots and renamed it WE Family Offices.

The firm’s three principals — Santiago Ulloa, Maria Elena Lagomasino and Michael Zeuner — as well as other employees, hold ownership interest in the firm’s current owner, WE Family Offices Holdings, LLC. Today, the firm’s team of nearly 50 includes 30 employees who focus on investment advisory and research.

What types of clients does WE Family Offices serve?

WE Family Offices caters to high net worth and ultra-high net worth individuals and families; the firm does not currently serve any individuals who do not meet the SEC’s definition of high net worth individual, which is anyone with at least $750,000 under management or a net worth of at least $1.5 million. While there’s no specified minimum investment requirement, the minimum annual fee that clients typically must pay is $150,000.

Many of the firm’s live outside the United States, primarily in Latin America and Europe. In fact, 67% of WE Family Offices’ current clients live abroad. Thus, the group has teamed up with two international firms — the UK-based investment advisor, Wren Investment Office, in London and the Spanish multi-family office, MdF Family Partners, in Madrid — to share resources and expertise. WE Family Offices has an ownership interest in Wren, and it sometimes shares client fees with MdF.

Services offered by WE Family Offices

WE Family Offices makes recommendations on most aspects of wealthy families’ financial lives. Advisors will weigh in on wealth management and investment strategy topics including family missions and objectives; asset allocation and investment choices; estate and tax planning; and risk management. They will also evaluate your current third party providers and charges. The team can also provide administrative support services, such as reporting and cash flow review.

The firm wants family members to be involved in the management of their wealth. Thus, WE Family Offices provides investment advice only through non-discretionary relationships, meaning clients receive information and advice from the team but must make the final decisions themselves.

Families who don’t yet use the firm for investment management but would like to trial it, or who are simply looking for financial planning assistance, can consider a “wealth diagnostic” engagement. With this service, clients receive an overall review of and plan for the family’s wealth, including their portfolio, providers, ownership structure and goals.

Here is a rundown of services offered by WE Family Offices:

  • Investment advisory services (separately managed accounts; non-discretionary)
  • Financial planning
    • Estate planning
    • Tax planning
    • Risk management
    • Family governance and succession planning
    • Investment manager selection
    • Service provider selection and fee negotiation
  • Family governance and education
  • Administrative services
    • Data aggregation and consolidated reporting
    • Transaction reconciliation
    • Review of cash sources and uses
  • Special projects
    • Multi-jurisdictional holding structures
    • Multi-generational transfer strategies

How WE Family Offices invests your money

Advisors make portfolio recommendations tailored to each client’s circumstances. To do so, they take into account factors such as a client’s time horizon, risk tolerance, asset class preferences, expected returns, taxes, cash flow and liquidity needs.

The team only recommends unaffiliated investment managers and funds to implement its asset allocation and investment strategy recommendations. In general, the team advises clients to choose from a wide variety of active and passive strategies including mutual funds, exchange-traded funds (ETFs), hedge funds, venture capital funds, real estate investment trusts (REITs) and venture capital funds or other private funds, as well as separate account managers.

For outside manager recommendations, the team relies on its approved list of investment managers determined based on various qualitative and quantitative factors, including performance, philosophy, management continuity, reputation and fees. The firm also relies on the unaffiliated consultant investment advisor, LCG Associates, to provide asset allocation and investment manager selection information and advice to the team.

WE Family Offices also assists families with values-based investing if the client would like to factor in environmental, social and governance issues into their investment choices.

Fees WE Family Offices charges for its services

WE Family Offices prefers that clients pay a flat annual fee that’s agreed upon in advance. However, some clients instead pay a fee based on a percentage of assets under management. The asset-based rate typically ranges from 0.45% to 1.50%, depending on factors such as the amount invested.

The standard fee schedule for clients who pay a flat annual fee is as follows. Note that the minimum annual fee charged by the firm is $150,000.

WE Family Offices Flat Fee Schedule
Net Worth Annual Flat Fee
$50 million to $250 million $250,000 to $500,000
$250 million to $500 million $500,000 to $700,000
$500 million to $1 billion $700,000 to $1 million
$1 billion or greater $1 million and more

On top of these advisory fees, clients pay their own custodian and brokerage fees. The firm does not offer wrap accounts, which bundle those fees with the advisory fee. Clients are also responsible for third-party investment manager fees, including mutual fund, ETF and other private manager fees, which typically range from 0.10% to 5.00% of assets per year.

Clients interested only in standalone financial planning assistance can opt for the “wealth diagnostic” engagement, which carries a fixed fee of $50,000 to $100,000.

WE Family Offices’ highlights

  • Fee-only: WE Family Offices is a fee-only firm, meaning it earns money strictly from the fees its clients pay. None of the firm’s revenue comes from selling certain products or investments, removing financial incentives that could create potential conflicts of interest.
  • International expertise and alliances: With more than half of the firm’s clients living abroad, the team has experience with the complexity that comes with international jurisdictions and structures. Additionally, the group can tap the resources of its alliance firms in Madrid and London.
  • Focus on environmental, social and governance issues: The team at WE Family Offices can help clients factor specific values into their investments. What’s more, the team also focuses on certain values in its own business. WE Family Offices has earned the B Corporation status, which means a third party externally validated that the firm balances profit and purpose by taking into account issues such as social and environmental performance, public transparency and legal accountability. Potential clients can learn more about the firm’s B Corporation status here.
  • Industry recognition: The firm has made the list of the industry’s top registered investment advisors from publications such as Financial Advisor magazine and the Financial Times. The factors considered in these rankings include assets under management and compliance records.
  • Clean disciplinary record: The firm has no material disciplinary actions to disclose. See more below.

WE Family Offices’ downsides

  • Caters to the ultra-rich: With a $150,000 minimum annual fee, only the world’s deep-pocketed individuals have access to WE Family Offices services. In a further indication of the firm’s exclusivity, the lowest tier in its published fee schedule is for clients with a net worth between $50 million and $250 million, with the top tier addressing rates for clients with a net worth of $1 billion or more.
  • Limited geographic footprint: WE Family Offices only offers financial services in Florida and New York. Clients who live elsewhere but prefer to regularly meet face-to-face with their advisors should explore other options. That being said, the firm does have experience working with clients abroad.
  • No hands-off relationships: Clients hoping to largely free themselves of the decision making around their wealth management may want to look elsewhere. The firm only works with clients on a non-discretionary basis, meaning it provides advice and guidance but leaves the final say to the client. Although the firm can fill out the trade instructions, clients should expect to sign off on every trade.

WE Family Offices’ disciplinary disclosures

WE Family Offices lists no disclosures over the last 10 years, giving it a clean disciplinary record. Registered investment advisors are required by the Securities and Exchange Commission (SEC) to disclose on their Form ADV any legal or disciplinary actions against the company, an affiliate or an employee that would be material to a potential client’s evaluation of the firm or the integrity of the management team.

WE Family Offices’ onboarding process

To contact WE Family Offices, fill out the contact form provided on the firm’s website or call the Miami or New York office, depending on your location. Potential clients can also find a wealth of information about the firm’s services, fees and philosophies on its FAQ page.

Once established as clients, the firm says your advisor will regularly be in touch. Clients can expect to meet with their advisor at least quarterly to discuss their portfolio. Every year, advisors and the senior management team sit down with clients for a comprehensive review.

Clients choose their own custodians, but the team can recommend one if requested.

Is WE Family Offices right for you?

WE Family Offices is focused on serving wealthy individuals and families. Families with a presence outside the United States may find the firm’s resources and knowledge around serving international clients particularly attractive. Families looking to be involved in their wealth management may like that the firm leaves control of the accounts to the clients through non-discretionary relationships.

Investors who don’t have a high net worth, however, as well as those who want to meet in-person with their advisor but are located outside of Miami and New York, may consider looking elsewhere. Many different types of investment advisors exist, and it is the client’s job to find possibilities appropriate for their unique needs.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

magnifymoney

Connect with a Financial Advisor to Help You Grow & Protect Your Wealth

Find An Advisor
Terms & Conditions Apply.

Advertiser Disclosure

Investing

Review of First Republic Investment Management

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone and is not intended to be a source of investment advice. It may not have not been reviewed, commissioned or otherwise endorsed by any of our network partners or the Investment company.

Written By

Reviewed By

First Republic Investment Management is a registered investment advisor headquartered in San Francisco, with additional locations along the East and West coasts, as well as one in Jackson, Wyo. The firm’s team of more than 640 employees provides investment management and financial planning services to individuals and institutions. Today, the firm has more than $87 billion in assets under management (AUM).

All information included in this profile is accurate as of August 10, 2020. For more information, please consult First Republic Investment Management’s website.

Assets under management: $87,280,528,053
Minimum investment: None specified, but minimum annual fee of $7,500 required for investment advisory services
Fee structure: A percentage of AUM; fixed fees; performance-based fees
Headquarters: 111 Pine Street
San Francisco, CA 94111
firstrepublic.com/private-wealth-management/
(415)-392-1400

Overview of First Republic Investment Management

First Republic Investment Management is the private wealth management arm of First Republic Bank. The parent bank, which purchased the investment management group in 1999, is a California state-chartered commercial bank that provides personal and commercial banking services to individuals, businesses and nonprofits. First Republic Bank was founded in 1985, and has traded publicly on the New York Stock Exchange since 2010.

Today, the bank’s private wealth management division has a team of about 641 employees, with more than 330 performing investment advisory roles. The firm’s 28 offices are primarily located along the nation’s coasts, with a number of offices in California, as well as locations in Oregon, Massachusetts, Connecticut, New York and Florida. Inland, the firm has an office in Wyoming.

What types of clients does First Republic Investment Management serve?

The firm caters to individuals and families, as well as their estates and charitable foundations. More than half of these clients are considered high net worth individuals, which the SEC defines as those who have at least $750,000 in assets under management or a net worth of at least $1.5 million.

The firm does not require a minimum investment amount for advisory services; however, clients are generally required to pay at least $7,500 in annual fees. The firm’s robo-advisor program, dubbed Eagle Invest, is an exception: It charges no minimum annual fee, but instead requires clients to invest at least $5,000.

Institutional investors round out the firm’s client list. Its roster includes pension plans, defined contribution plans, profit-sharing plans, private pooled investment vehicles, banks, corporations, nonprofits and other businesses, as well as Eagle Alternative Investment Funds.

Services offered by First Republic Investment Management

Clients can turn to First Republic to manage their portfolios and help plan their financial lives.

Investment management: When establishing a relationship, the firm helps clients identify their goals and objectives, review their current holdings and create a custom portfolio suited to their needs, which includes identifying suitable investment managers and funds. The firm then continuously monitors the portfolio and its performance.

Most clients establish a discretionary relationship, in which the advisor makes the daily trading decisions in the account without needing the client to sign off. Others choose a non-discretionary account, where clients receive recommendations from the advisor but maintain control over trading decisions.

Financial planning: First Republic offers more comprehensive financial planning services to high net worth clients, including many business owners. These clients can expect a detailed review of their goals and financial situation, addressing topics such as asset allocation, retirement, equity compensation, estate and generational planning, insurance and charitable giving. The firm also may recommend life, disability or long-term care insurance.

Robo-advisor service: Individuals with as little as $5,000 to invest or who are looking for less costly portfolio management can consider Eagle Invest, the firm’s robo-advisor program, which is offered through the third party FutureAdvisor. This online program uses a computer algorithm to invest a client’s funds based on their answers to a series of questions around risk tolerance, objectives and other aspects of their financial situations. Client money is invested in one model portfolio, largely spread across exchange-traded funds (ETFs) and money market funds, and can include up to nine equity and fixed income asset classes. Communication is intended to happen entirely online.

Private pooled investment vehicle management: Finally, the firm also manages some private pooled investment vehicles, known as the Eagle Alternative Investment funds. Wealth managers may recommend clients invest in those funds or directly into other private funds.

Here is a complete list of services offered by First Republic Investment Management:

  • Investment management services (separately managed and wrap fee accounts; discretionary and non-discretionary)
  • Financial planning
    • Retirement planning
    • Trust and estate planning
    • Charitable planning
    • Education planning
    • Business planning
    • Long-term care planning
    • Cash flow forecasting
    • Spending analysis and budgeting
  • IRA and 401(k) rollovers
  • Insurance and risk management for individuals and businesses
  • Trust and estate services
  • Employee benefit plan services
  • Workshops and seminars

Separately, a large portion of the firm’s wealth managers and representatives are licensed as broker dealers through the firm’s affiliated broker-dealer, First Republic Securities Company. Thus, outside of these advisory relationships, wealth managers can also buy and sell securities for clients and earn compensation per transaction, often in the form of a commission. Many of the firm’s wealth managers are also licensed to sell insurance products.

How First Republic Investment Management invests your money

When initially starting a relationship with First Republic, clients should expect a review of their goals and current financial situation. To create the client’s custom investment plan, wealth managers take into consideration characteristics like a client’s objectives, financial situation, time horizon, risk appetite, tax bracket and cash needs. The firm’s advisors each have their own investment philosophies and preferences, so performance can vary based on the wealth manager.

First Republic Investment Management offers many investment strategies across multiple asset classes, including publicly traded equities, fixed income and private securities. Multi-asset strategies can also include funds that invest in hedge funds, private equities and other categories, such as alternative investments and derivatives. Wealth managers also may recommend investing directly in a security or through a mutual fund, ETF or private fund.

Clients interested in environmental, social and governance issues should turn to the firm’s Sustainable and Responsible Investing team. This group can help clients factor into their portfolios issues that matter to them, such as resource and waste management, carbon emissions, factory conditions, product quality and safety and board diversification. On the flip side, clients opposed to certain activities can use specific screens that evaluate companies’ involvement in alcohol, tobacco, gambling, weapons, fossil fuels, genetically modified foods and more.

Fees First Republic Investment Management charges for its services

How much clients pay will vary by service and asset type, and their rate is negotiated with the wealth manager. For the management of fixed income portfolios, clients generally pay an annual fee calculated as a set percentage of the total assets under management. For equity portfolios, the annual fee is tiered, meaning clients pay a lower rate for additional assets invested. In some cases, clients simply pay a flat fee. Fees are charged quarterly in advance, and can be deducted from the account or billed to the client.

Keep in mind the firm typically charges a minimum annual fee of $7,500, which should be no more than 3% of assets under management. That minimum may be reduced in certain circumstances, though, and does not apply to the robo advisor Eagle Invest program.

Here are the firm’s standard fee schedules for equity/balanced portfolios and fixed income portfolios:

Incremental Fee for Equity/Balanced Portfolios
Assets Under Management Incremental Fee
First $2 million 1.50%
$2 to $5 million 1.25%
$5 to $10 million 0.75%
$10 to $25 million 0.60%
$25 million and up 0.45%
Total Fee for Fixed Income Portfolios
Assets Under Management Total Fee
$2 million to less than $10 million 0.40%
$10 million to less than $25 million 0.35%
$25 million or greater 0.30%

On top of these advisory fees, clients can expect to owe internal fees on products they are invested in, including mutual funds, ETFs, certain private funds and insurance products. Some private funds may also charge performance-based fees, which are determined based on a percentage of the fund’s unrealized and realized gains and only apply if a certain benchmark is reached. Brokerage commission and transaction fees will also be added on top of these advisory fees in non-wrap accounts, where clients pay advisory, brokerage and custodian fees separately.

The firm does offer a wrap fee program, where transaction and custody costs are bundled in the fees. Wrap clients must use the affiliated First Republic Securities Company for brokerage services, which uses Pershing as its clearing broker.

The lower-cost robo advisor Eagle Invest program charges an annual fee of 0.40% of assets under management, which acts as a wrap fee and thus includes trading and custody costs.

Finally, financial planning and consulting clients pay a flat fee negotiated based on the scope of the work requested. Clients who use First Republic Bank and maintain certain amounts of money in their accounts can have these fees waived.

First Republic Investment Management’s highlights

  • Serves middle-income clients: Unlike many advisory firms that require a seven-figure investment to get in the door, more than 40% of First Republic’s individual clients do not classify as high net worth. Additionally, the firm does not require a strict minimum investment amount, though it does have a minimum annual fee of $7,500.
  • Offers flexible account options: First Republic Investment Management does not take a one-size-fits-all approach. Clients have a number of options in many regards: They can choose to wrap in trading and custody costs or pay separately; hand over day-to-day control of their account or hang onto it; open a separately managed account or go with the lower-cost robo-advisor program; or stick with publicly traded equities and fixed income or add in private funds with exposure to alternatives such as private equity and hedge funds.
  • Factors in sustainability and responsibility: A specific team at First Republic can help clients be mindful of certain environmental and responsibility issues that matter to them, as well as weed out companies with operations they’re opposed to, such as weapons, fossil fuels or genetically modified foods.
  • Provides discounts to bank customers: First Republic Bank clients who maintain specific deposit levels in their accounts can access financial planning and consulting services at no additional cost.
  • Offers cheaper online-only portfolio management: Investors just starting out, or who have smaller accounts, can consider the firm’s robo-advisor program, Eagle Invest. It charges an annual fee of 0.40% for portfolio management, and requires only $5,000 to start investing.

First Republic Investment Management’s downsides

  • Earns revenue for selling certain products: First Republic receives compensation for selling clients certain mutual funds and insurance products, creating a financial incentive for advisors to push those products. This creates a potential conflict of interest between clients and the firm. Additionally, the firm’s affiliated broker-dealer stands to earn revenue when wealth managers recommend particular mutual fund share classes or money market mutual funds.
  • Product referrals come with payments: Wealth managers at First Republic Investment Management are paid to recommend certain First Republic Bank products and services to clients, such as loans against their portfolio and their trust and estate services. Thus, always dig deeper if a particular service is being recommended. On the flip side, the firm also pays eight parties to recommend its investment management services to potential clients.
  • Incentivized to recommend its affiliated broker-dealer: First Republic has a financial incentive for advisors to recommend its affiliated broker-dealer, which may cost clients more than an unaffiliated broker.
  • Not all advisors can offer all services: Not all wealth managers can place clients into certain sophisticated private investments. Clients interested in those private funds should confirm what a potential advisor can offer them.
  • Limited geographic footprint: Most of the firm’s offices are primarily located on the East and West coasts, with a heavy presence in California and New York. Potential clients living in the middle of the country who want a local advisor may need to look elsewhere. However, for those looking for more financial advisors in the area, here is a comprised list of the best financial advisors in New York.

First Republic Investment Management disciplinary disclosures

All registered investment advisors are required by the SEC on their Form ADV paperwork to disclose disciplinary and legal events against the firm, its employees or an advisory affiliate that would be material to a client evaluating the firm and the integrity of the management team.

First Republic’s disclosures include one allegation from the SEC. The SEC alleged that from January 2014 through July 2018, the firm purchased, recommended or held more expensive mutual fund share classes that paid compensation to First Republic when other less expensive share classes were available, and did not adequately disclose this conflict of interest. First Republic settled with the SEC without admitting or denying the findings, paying about $1 million in disgorgement and prejudgement interest but no civil monetary penalty or fine. The SEC also settled with 78 other investment advisors at the same time for similar conduct.

First Republic also includes one disclosure about a specific individual.

First Republic Investment Management onboarding process

Potential clients can contact the wealth management division of First Republic by calling 800-392-1400, or searching for a local office in their area on the website’s Office Locations tab. You can also fill out a contact form on First Republic’s website to have the firm contact you.

Established clients can expect to receive ongoing reviews of their accounts from their wealth managers and reports at least quarterly. Clients should immediately notify their wealth manager about any changes in their investment objectives, risk tolerance or other financial situations, which may prompt more frequent reviews.

Is First Republic Investment Management right for you?

Clients living near one of First Republic Investment Management’s 28 offices may consider the firm if they’re looking for portfolio management and straightforward financial advice. (More comprehensive financial planning and consulting is limited to high net worth investors for a fee.) Investors with leaner pockets will appreciate that the firm works with clients not deemed high net worth, and even offers a less expensive online robo-advisor option for investors with as little as $5,000.

Keep in mind, however, that the firm can earn compensation from certain product recommendations, such as life insurance and mutual funds. What’s more, wealth managers are paid well to recommend the bank’s products. Thus, it is the client’s job to ask questions about why a product is being recommended and what the wealth manager or firm stands to gain from the recommendation.

As is always the case when you’re researching financial advisors, make sure you understand how much and from whom the advisor earns money off of your business. Then you can decide if the firm’s services and performance are worth the cost.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

magnifymoney

Connect with a Financial Advisor to Help You Grow & Protect Your Wealth

Find An Advisor
Terms & Conditions Apply.