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Review of Freestone Capital 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.

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Freestone Capital Management is a registered investment advisory firm headquartered in Seattle, with additional offices in San Francisco, Santa Barbara, Calif. Sunnyvale, Calif. and Portland, Ore. With over $5.4 billion in assets under management (AUM), Freestone provides both investment advisory and wealth management services to its client base of largely high net worth individuals.

In addition to traditional investment strategies, Freestone believes in diversifying client portfolios even further, and employs a number of private funds covering investments such as manufactured homes and affordable housing.

All information included in this profile is accurate as of April 29 2020. For more information, please consult Freestone Capital Management’s website.

Assets under management: $5,401,931,749
Minimum investment: No required minimum, though generally $500,000 or $1 million preferred
Fee structure: Typically a percentage of AUM; commissions; performance-based fees
Headquarters: 701 Fifth Avenue
74th Floor
Seattle, Washington 98104
https://www.freestonecapital.com/
(800) 990-3001

Overview of Freestone Capital Management

Freestone Capital Management was founded in Seattle in 1999 by Gary Furukawa, a former broker at E.F. Hutton and Smith Barney. The firm is named after a freestone river, considered an auspicious spot for fly fishing, a hobby of Furukawa’s.

Furukawa started the firm because he wanted to provide holistic financial planning to his clients and go outside traditional asset management. The timing of the firm’s founding coincided with Seattle’s tech boom, and many of the firm’s clients were drawn from that industry.

Today, Furukawa and his wife Della own between 25% and 50% of the firm through Freestone Capital Holdings, and employees of the firm own the remaining amount. Freestone has 67 employees, 26 of whom serve in investment advisory and research roles.

What types of clients does Freestone Capital Management serve?

Freestone’s clients are largely high net worth individuals and individual investors. (For reference, the SEC defines high net worth individuals as those with at least $750,000 under management or a net worth of at least $1.5 million.) In addition, Freestone provides investment advisory services to pensions and profit-sharing plans, pooled investment vehicles, charitable organizations and corporations.

While Freestone doesn’t have a hard minimum account requirement, the firm does believe that given its investment strategy of alternative asset classes, it’s best suited for those who are able to invest at least $1 million (or $500,000 for clients who are referred through Schwab Advisor Network, a client referral program that Freestone participates in). The firm prefers to work with clients on a discretionary basis, meaning Freestone is allowed to make trades in their portfolio without getting prior approval each time, but can work on a non-discretionary basis in some circumstances, notably with managed accounts.

Services offered by Freestone Capital Management

Freestone Capital Management’s offerings center around investment advisory and wealth management services.

Through its asset management services, the firm combines its expertise in traditional and alternative asset classes with third-party expertise in domestic and global equity, domestic and global fixed income and alternative investments. Based on an understanding of a client’s financial goals and objectives, risk tolerance, time horizon and liquidity needs, Freestone develops a personalized investment plan.

In addition, Freestone offers wealth management and financial planning services to its advisory clients, usually at no additional cost. The level of service offered may depend on the amount of assets the firm manages for the client as well as how complex the client’s situation is, but may extend to areas such as tax planning, estate and trust planning and philanthropy. The firm also may recommend outside professionals to provide additional services.

Here is a complete list of services that Freestone Capital Management offers:

  • Asset management
  • Wealth management and financial planning
    • Retirement and benefit plan solutions
    • Credit and risk analysis
    • Insurance planning
    • College planning
    • Corporate benefits, including advice on stock options
    • Business valuation
    • Tax planning
    • Estate and trust planning
    • Philanthropy

How Freestone Capital Management invests your money

To invest its clients’ assets, Freestone Capital Management uses a combination of internally managed model portfolios; model portfolios developed by outside firms and managed either by Freestone or outside firms; and alternative investments, including private and third-party funds.

In addition to upside performance, Freestone also focuses on downside risk based on what the firm calls a “Stay Wealthy” approach. Freestone touts a belief in broad diversification, well beyond the traditional asset classes of equities, fixed income and cash. To achieve that level of diversification, the firm has a series of private funds investing in alternative asset classes through its affiliates. Among the alternative investment strategies Freestone uses are:

  • Long and short equity strategies
  • Distressed investing or arbitrage strategies
  • Private placements and other restricted securities
  • Interests of a single private fund issuer sold in the secondary market
  • A multi-manager and fund-of-funds investment approach
  • Real estate investments
  • Fund of funds or multi-manager funds
  • Private equity investments
  • Privately originated corporate loans or cleared and over-the-counter financial instruments

Freestone largely manages client assets on a discretionary basis, meaning that it does not run investing decisions by clients prior to executing them. The firm allows clients to place “reasonable restrictions” on the types of investments purchased, using the example of prohibiting tobacco stocks. However, Freestone reserves the sole discretion to determine what constitutes a “reasonable restriction,” and might refuse to carry out these requests if they interfere too much with an investment strategy.

Fees Freestone Capital Management charges for its services

Asset-based fees: Typically, Freestone charges clients based on a percentage of assets under management. This fee covers both investment advisory services and wealth management and financial planning services. While rates vary, they will not exceed 1.50% of the value of a client’s assets.

Minimum annual fee amounts vary depending on whether the client was referred through the Schwab Advisor Network. New advisory clients who are referred by the program must pay a minimum of $4,000 per year, while new clients who are not referred through Schwab will owe a minimum annual fee of $6,000.

However, these minimums may be waived at Freestone’s discretion. Additionally, these fees might be lower depending on client type, account size, anticipated increase in the client’s account and preexisting relationships. Sometimes, household account amounts are combined for the purposes of receiving a lower rate.

In addition to Freestone’s asset-based management fee, clients may also pay an investment advisory fee charged by third-party subadvisors that Freestone might engage; those fees are disclosed in the investment management agreement. Additionally, clients will be responsible for any custodial fees, brokerage commissions, fund fees or trading costs incurred.

Performance-based fees: Freestone also charges performance-based fees on some of its private fund investments. Performance-based fees are only charged to “qualified clients,” who are defined by the SEC as having a net worth of at least $2.1 million. Freestone negotiates the terms of these fees on a case-by-case basis and includes the terms of the fees in the investment management agreement.

Private fund fees: Freestone manages a number of private funds to carry out its alternative investment mandate. These funds typically have a 1% annual management fee, a performance-based fee and an asset-based fee of 0.10%. Clients are not charged operating expenses and other costs on top of the fees charged by Freestone’s private funds. However, when clients assets are invested in private funds managed by a third party, they may be charged two levels of fees.

Commissions: For non-discretionary accounts, Freestone may recommend and sell life and disability insurance as some of its advisors also have the ability to sell insurance. If those recommendations result in a sale, Freestone may receive a commission.

Freestone Capital Management’s highlights

  • Unique investment style: With its emphasis on alternative investments, Freestone Capital Management veers into nontraditional areas in order to create highly diversified portfolios with investments in directly owned real estate. Freestone has carved out a name for itself by investing in mobile homes and affordable housing.
  • Attention to downside risk: Freestone pays a lot of attention to downside risk, not just capturing upside returns. While that may hamper portfolios during market upswings, it might protect them from suffering the same severe losses as the market in general.
  • Awards and accolades: The Freestone Capital Management team regularly lands on lists of top advisors. Barron’s ranked senior partner Erik Morgan No. 12 out of the 100 best advisors in the United States overall in 2019, and that same year Financial Advisor Magazine ranked the firm at No. 57 in its rankings of the top RIAs.

Freestone Capital Management’s downsides

  • High maximum rate: Freestone Capital Management’s maximum rate of 1.50% for its investment advisory services is well above the industry average of 1.02% for accounts of $1 million in assets, according to a study by AdvisoryHQ.
  • Charges performance-based fees: Freestone also charges performance-based fees to clients who participate in the firm’s private funds. Though these fees can sometimes be charged in lieu of asset-based fees, performance-based can still create an incentive for advisors to take investment risks in an attempt to achieve outsized returns. Additionally, this fee arrangement could pose a conflict of interest, as advisors may be incentivized to recommend private funds over other types of investments due to the higher potential returns.
  • Sells insurance: Freestone can earn a one-time commission for recommending the purchase of life and disability insurance products to its non-discretionary clients, and this financial incentive could pose a potential conflict of interest. To mitigate this issue, the firm discloses this conflict in writing prior to the sale and maintains that clients are free to take the recommendation and make their insurance purchase elsewhere.
  • Potential conflicts related to brokerage selection: Clients of Freestone must maintain a brokerage account at Charles Schwab. Because Freestone participates in a client referral program at Schwab, the firm has a financial incentive to use Schwab in order to get these referrals. In addition, Freestone uses soft dollar arrangements, which are credits or rebates from a brokerage firm on commissions that a client pays for trades executed in a firm’s client accounts. This might lead a firm to favor the brokerages that participate in soft dollar arrangements instead of the brokerage that offers the best trade execution. Freestone insists that it uses its rebates to purchase research that benefits all client accounts, even those that aren’t subject to soft dollar arrangements.

Freestone Capital Management disciplinary disclosures

Freestone Capital Management does not have any disciplinary disclosures listed in its Form ADV.

SEC-registered firms are required to provide prompt disclosures of any legal or disciplinary actions in their Form ADV to help current and prospective clients evaluate the firm. The type of legal and disciplinary events that must be disclosed include criminal and civil actions, administrative proceedings before a federal regulatory agency and proceedings before a self-regulatory organization.

Freestone Capital Management onboarding process

To find out more about working with Freestone Capital Management, call (800) 990-3001 or reach out to one of the offices directly using the contact information listed on the firm’s website. Alternatively, you can fill out this form on Freestone’s website to start working with a client advisor.

When clients sign on with Freestone, they are assigned a team consisting of a client advisor and one or more client service associates to oversee the day-to-day responsibilities. When appropriate, Freestone advisors will work with a client’s other financial professionals to create a holistic money management strategy.

Is Freestone Capital Management right for you?

Freestone Capital Management brings a unique investment style that’s aimed at helping clients withstand economic downturns with its cadre of private funds. The firm works to unify investment advisory services with wealth management for a holistic client experience.

Though the firm doesn’t have a hard minimum, it generally prefers to work with those who can invest at least $1 million (or $500,000 for those who come through the Schwab referral program). Its roster of clients is mostly high net worth, though it does serve a number of individuals without high net worths as well. And with five West Coast offices, Freestone will likely be most accessible to investors in that region.

However, Freestone Wealth Management’s myriad financial arrangements with outside entities might give investors pause. The firm has a number of potential conflicts of interest that could call into question whether recommendations are made in the client’s best interest or due to financial incentives. As is the case with vetting any financial service or product, you’ll want to make sure you ask questions and understand all costs involved beforehand.

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Review of Voya 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

Voya Investment Management is a New York-based registered investment advisor that manages investments for institutions and individual clients. With 206 investment advisors, Voya Investment Management covers a wide range of investment strategies, including equity, fixed income, real estate and hard currency.

All information included in this review is accurate as of March 18, 2020. For more information, please consult the Voya Investment Management website.

Assets under management: $108,248,624,160
Minimum investment: $1,000, no minimum on some investment types
Fee structure: Assets under management
Headquarters location: 230 Park Ave New York, NY 10169
https://investments.voya.com/
212-309-8200

Overview of Voya Investment Management

Voya Investment Management got its start in 1972 when it was known as Aetna Capital Management. For many years the firm was a subsidiary of Amsterdam-based ING Holdings. But when ING began divesting its U.S. retirement, investment and insurance business in 2013, the firm rebranded to Voya, an abstract name meant to evoke the image of a “voyage.”

Today, Voya Investment Management Co. LLC is a registered investment advisor and is a wholly-owned subsidiary of Voya Holdings, which is in turn a wholly-owned subsidiary of Voya Financial Inc. (VOYA), a publicly traded company.

What types of clients does Voya Investment Management serve?

Voya Investment Management largely caters to institutional clients in its role as an advisor and sub-advisor. The firm manages the investments of other investment companies. In addition, Voya provides investment management directly to state and municipal governments, insurance companies, corporations, pensions, charitable organizations and banks and thrift institutions. Only about 2% of the amount of assets Voya manages is on behalf of individual investors.

Voya primarily charges a percentage of assets under management, though the firm also charges performance-based fees in some instances.

For institutional clients, Voya’s minimum ranges from $25 million to $100 million. Investors in R share classes, available through qualified retirement accounts, have no investment minimum. When it comes to mutual funds for individual investors, Voya typically has a $1,000 minimum.

Services offered by Voya Investment Management

For individual investors, Voya has a lineup of over 40 mutual funds covering such diverse asset classes as equities, infrastructure, real estate, hard currency and bonds. In addition, the company maintains a roster of target-date funds whose end dates range from 2020 to 2060 in five-year increments.

Alongside traditional mutual funds, many of these strategies also come in 40 variable portfolios that are available exclusively within variable annuity contracts.

Voya also provides portfolio management services to investment companies, small businesses, pooled investment vehicles, large businesses, selection of other advisors including private mutual fund managers and publications and newsletters.

For individual investors, Voya provides the following services:

  • Portfolio management
  • Selection of portfolio managers
  • Wrap programs
  • Publications of newsletters

How Voya Investment Management invests your money

Voya runs a number of index funds and strategies. For actively-managed strategies, Voya seeks to uncover value before the rest of the market. Voya uses the insights of its analysts for fundamental research into these hidden opportunities.

In addition, Voya has a number of equal-weighted funds. Unlike market-weighted portfolios, the strategy most index funds follow, equal-weighted funds allocate the same amount of assets to each name in the portfolio. The strategy is intended to minimize concentration in the market’s largest companies. Voya’s Corporate Leaders 100 and Global Perspective are two funds that employ this strategy.

In fixed income, Voya applies a macro view alongside bottom up security selection. In addition, Voya applies environmental, social and governance factors in its security selection when the managers believe it’s appropriate.

Portfolio/Fund Name Investment Strategy
Voya CBRE Global Infrastructure Infrastructure
Voya Corporate Leaders 100 Large Blend
Voya Diversified Emerging Markets Debt Emerging Markets Bond
Voya Emerging Markets Hard Currency Debt Emerging Markets Bond
Voya Floating Rate Bank Loan
Voya GNMA Income Intermediate Government
Voya Global Bond World Bond
Voya Global Corporate Leaders World Large Stock
Voya Global Diversified Payment World Allocation
Voya Global Equity Dividend World Large Stock
Voya Global Equity World Large Stock
Voya Global Multi-Asset World Allocation
Voya Global Perspectives Fund World Allocation
Voya Global Real Estate Global Real Estate
Voya High Yield Bond High Yield Bond
Voya Intermediate Bond Intermediate Core-Plus Bond
Voya International High Dividend Low Volatility Foreign Large Value
Voya Investment Grade Credit Corporate Bond
Voya Large-Cap Growth Large Growth
Voya Large Cap Value Large Value
Voya MidCap Opportunities Mid-Cap Growth
Voya Mid Cap Research Enhanced Index Mid-Cap Blend
Voya Multi-Manager Emerging Markets Equity Diversified Emerging Markets
Voya Multi-Manager International Small Cap Foreign Small/Mid Blend
Voya Real Estate Real Estate
Voya Russia Miscellaneous Region
Voya SMID Cap Growth Mid-Cap Growth
Voya Securitized Credit Multisector Bond
Voya Short Term Bond Short-Term Bond
Voya SmallCap Opportunities Small Growth
Voya Small Company Small Blend
Voya Strategic Income Opportunities Nontraditional Bond
Voya Target In-Retirement Target-Date Retirement
Voya Target Retirement 2020 Target-Date 2020
Voya Target Retirement 2025 Target-Date 2025
Voya Target Retirement 2030 Target-Date 2030
Voya Target Retirement 2035 Target-Date 2035
Voya Target Retirement 2040 Target-Date 2040
Voya Target Retirement 2045 Target-Date 2045
Voya Target Retirement 2050 Target-Date 2050
Voya Target Retirement 2055 Target-Date 2060
Voya U.S. High Dividend Low Volatility Large Value

Fees Voya Investment Management charges for its services

Typically, Voya Investment Management charges a percentage of AUM to manage clients’ money, though sometimes Voya has other billing arrangements in place.

For individual investors in Voya’s mutual funds, fees range from around 0.50% for the target date funds to 2.00% for the Voya Russia Fund. In addition, the A shares of the firm’s funds levy a 5.75% maximum upfront commission. However, investors can have the front-end load amount reduced with higher deposit amounts.

In addition, Voya also provides wrap program services to broker-dealers. If Voya is selected to be the investment, clients will pay one fee to their broker-dealer for Voya’s service and Voya bills the broker-dealer. In those cases, Voya charges less to the broker-dealer for its services than it would normally charge. However, clients may pay more than going to Voya directly.

Equity Funds Class A Shares Commissions
Total balance Fee
Up to $49,999 5.75%
$50,000-99,999 4.50%
$1 million-249,999 3.50%
$250,000-$499,999 2.50%
$500,000-999,999 2.00%
Over $1 million 0.25%-0.35% 12b-1 fees and 0.25% tail fee for 13 months
Fixed Income Funds Class A Shares Commissions
Total balance Fee
Up to $100,000 2.50%
$100,000-$499,999 2.00%
Over $500,000 N/A

Voya Investment Management’s highlights

  • Covers all bases: Voya’s investment lineup is exhaustive. In addition to typical asset classes, such as equities and fixed income, Voya also has offerings in alternative investments like real estate, global real estate, hard currency and Russian companies. Sophisticated investors who want exposure to these niche areas will be able to complete their portfolios, however, they might be assuming additional risk.
  • High customization: In separately managed accounts, Voya will tailor investments to the individual needs of its clients, such as excluding certain industries and securities if clients have an objection or emphasizing environmental, social and governance factors for those who prioritize that in their investments.
  • Best place to work: Over the years, Voya Investment Management has landed on several lists as a best place to work. For example, in 2019, the firm made it to Pension & Investment Magazine’s “Best Places to Work in Money Management” for the fifth consecutive year. In 2018, the firm was recognized as a “Best Place to Work for Disability Inclusion” by the American Association of People with Disability and the U.S. Business Leadership Network.
  • Low fees: While the gross expense ratio of Voya’s mutual funds seem high, the firm has contractually agreed to waive certain fees. As a result, many of Voya’s mutual fund fees are classified as either “below average” or “low” by Morningstar, the fund research company. On the other hand, A shares of the funds carry a 5.75% upfront commission.

Voya Investment Management’s downsides

  • Few offerings for individual investors: Voya Investment Management’s services are limited to investment management and don’t include financial planning. Further, its focus on institutional investors and high net worth clients mean that individuals who want to invest in Voya funds will first need to find a financial advisor (and pay a commission) to help them invest.
  • Collects performance fees: Voya’s use of performance fees could potentially push portfolio managers to take on additional risk in an effort to boost performance.
  • Potential conflicts of interest: Some Voya Investment Management employees are also registered representatives of Voya Investment Distributors and can receive a commission for the sale of investments managed by Voya. This creates an inherent conflict of interest since these representatives receive financial remuneration for their recommendations.
  • Could be on the auction block: Voya Financial, the parent company of Voya Investment Management, held talks to sell itself in late 2019 with several big insurance companies. Though the talks didn’t result in a sale, there’s speculation that the firm could be on the market with private equity companies in the mix of potential buyers. A sale could result in some disruption for investors as the company transitions from one owner to another.

Voya Investment Management disciplinary disclosures

In 2013, two directors of ING Pomona Private Equity, a closed-end fund of funds and a Voya affiliate, organized in Luxembourg, ran afoul of Luxembourg securities regulation when they failed to file the annual financial statement in a timely manner with the Luxembourg Commission de Surveillance du Sector Financier. The fund received a fine of 2,000 euros. The directors argued that they are not engaged in day-to-day fund activities such as filing annual statements. What’s more, since the fund is a fund-of-funds, it must first receive financial statements from the underlying portfolios in order to file its own annual statement. Besides the monetary fine, there were no other actions taken.

Voya Investment Management onboarding process

To access one of the Voya funds or strategies you’ll need to go through an intermediary, whether that’s a financial advisor or a retirement plan at work. You can get a prospectus for a Voya Investment Management fund by calling 800-992-0180.

Is Voya Investment Management right for you?

Voya has a wide range of investment options that can be the backbone of most people’s investment portfolios. It’s suite of below average and low-fee funds (after sales charges) speak favorably of the line.

However, because Voya’s primary business is institutional, individual investors can only access Voya’s investment strategies through an intermediary such as a financial advisor or in a workplace retirement plan. Advisors who sell Voya funds collect an upfront commission, giving them a financial incentive to do so. Investors need to weigh whether the added cost, plus the potential conflict of interest, are worth it. If you are interested in learning about more financial advisor firms in New York, check out the comprised list of our top options.

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Review of Wetherby Asset 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

Wetherby Asset Management is a San Francisco-based registered investment advisor (RIA) with an additional office in New York City. Catering to high net worth clients with at least $10 million to invest, the firm’s 40 financial advisors provide service to 500-plus clients and oversee roughly $4.85 billion in assets under management (AUM).

Along with traditional investment management, Wetherby also advises clients on impact investments across nearly every asset class. The firm also offers a full range of financial planning services.

All information included in this profile is accurate as of March 20th, 2020. For more information, please consult Wetherby Asset Management’s website.

Assets under management: $4,851,933,986
Minimum investment: $10 million (exceptions made on a case-by-case basis)
Fee structure: 0.15% to 1.00% of AUM; hourly fees; fixed fees; negotiated fees; contingent fees
Headquarters: 580 California Street
Eighth Floor
San Francisco, California 94104
www.wetherby.com
(415) 399-9159

Overview of Wetherby Asset Management

Wetherby Asset Management was founded in 1990 by Deb Wetherby, a former broker in Morgan Stanley’s private client division. Prior to that, Wetherby worked in the auditing and consulting department of Price Waterhouse, the accounting firm. In founding her RIA, Wetherby’s goal was to marry the investing know-how of Wall Street with the personalized service and objectivity of accounting.

Today, Wetherby Asset Management is privately held. Wetherby, who is the firm’s CEO and a wealth manager, owns between 10% and 25% of the firm. The remainder is distributed among 23 other shareholders, only four of whom are non-employees.

The firm generally requires its wealth managers to hold an advanced degree or professional license. Its current team includes a number of chartered financial analysts (CFA), certified financial planners (CFP) and certified private wealth advisors (CPWA).

Which types of clients does Wetherby Asset Management serve?

The vast majority of Wetherby’s clients are high net worth individuals, though the firm works with a limited number of individual investors who are not high net worth. For reference, the SEC defines high net worth individuals as those with at least $750,000 under management or a net worth of at least $1.5 million. In addition to individual investors, Wetherby manages money for charitable organizations, corporations, pooled investment vehicles and state and municipal government entities.

With a $10 million minimum, however, Wetherby caters almost exclusively to high net worth and ultra high net worth clients. In some instances, Wetherby will lower its minimum requirements. Still, clients at the top end of the asset level enjoy low fees and a high level of customization.

Services offered by Wetherby Asset Management

Wetherby Asset Management provides investment management services to all of its client types. Clients typically work with Wetherby under one or more of the following arrangements:

  • Discretionary: Wetherby has the discretion and authority to invest and place trades in client accounts according to a client’s established objectives and guidelines.
  • Non-discretionary: Wetherby provides investment guidance but does not have the authority to place trade in client accounts without prior approval.
  • Consulting: Wetherby provides investment advice as needed based upon a mutual agreement, but clients execute trades on their own.

Wetherby’s services also include an impact investing capability, which is the practice of investing in companies, organizations and funds with the intention of generating positive social and environmental change along with financial return.

In addition to investment management, Wetherby also offers its clients a wide range of financial planning services. These services are provided as needed, and clients may or may not incur additional fees for financial planning.

Here is a complete list of services currently offered by Wetherby Asset Management:

  • Investment management
    • Impact investing
  • Financial planning:
    • Financial statement preparation and analysis
    • Income tax planning guidance
    • Risk management/insurance analysis
    • Retirement planning
    • Estate planning
    • Education planning
    • Philanthropic planning
    • Intergenerational wealth transfer
    • Equity ownership and stock option advice

How Wetherby Asset Management invests your money

Wetherby Asset Management invests client money with the dual goals of growth and downside protection. The firm develops an investment policy for each client that takes into account each client’s needs and goals, as well as the current economic and market conditions.

Wetherby’s investment approach is long term, with advisors looking out at least a year, though changing market conditions could cause Wetherby to sell securities more quickly. The firm diversifies its investments across asset classes and among multiple money managers. To execute its investment strategy, Wetherby primarily uses actively managed funds, though it includes passively managed funds in client portfolios to reduce fees and taxes.

Clients have the ability to customize their portfolios with Wetherby. That being said, client assets are generally invested in open-end, no-load mutual funds and other pooled investment vehicles. In some cases, investments are made in individual equities, fixed-income securities, exchange-traded funds or closed-end mutual funds. Some clients may have assets invested in private investment funds or other separate account vehicles or strategies managed by outside advisors.

In addition, Wetherby clients have access to private fund offerings through LRHF II Holding Company, which is owned and managed by Wetherby Asset Management. Wetherby also has an impacting investing capability for clients who want it. With this service, the firm reviews the social and environmental challenges that clients want to address and then finds appropriate investments to meet those goals.

Fees Wetherby Asset Management charges for its services

Wetherby charges clients based on a percentage of assets under management for its discretionary investment management services. There different fee schedules for clients with portfolios under $10 million and portfolios over $10 million, with rates generally declining the more assets a client has invested. However, the firm’s rates are negotiable and may be lowered for charitable organizations or employees’ family members and friends.

Fee Schedule for Portfolios Under $10 Million
Assets Under Management Annual Rate
First $3 million 1.00%
Amounts over $3 million and up to $9 million 0.75%
Amounts over $9 million and up to $10 million 0.00%
Fee Schedule for Portfolios Over $10 Million
Assets Under Management Annual Rate
First $10 million 0.75%
Amounts over $10 million and up to $40 million 0.55%
Amounts over $40 million and up to $80 million 0.25%
Amounts over $80 million 0.15%

In addition to the fees charged by Wetherby, clients may be responsible for some trading fees, such as when investing in private placements. Clients will also incur expenses for investing in mutual funds and other pooled accounts. Further, clients who use the services of LRHF will be charged an additional fee.

Whetherby’s fee may also include a negotiated fee in which clients contribute a portion of their negotiated fee into Wethreby’s Donor Advised Fund.

In some circumstances, Wetherby may negotiate with another investment advisor on behalf of a client for a reduced fee. For this service, Wetherby fees may include a contingent fee, which is charged based on a percentage of the client’s savings.

For the firm’s non-discretionary asset management and consulting services, clients may be charged either a fixed or hourly fee, with the rate varying based on the complexity of the client’s situation.

Wetherby Asset Management’s highlights

  • Low fees (for big investors): Those with more than $80 million to invest can enjoy rock bottom fees of 0.15%. A sampling of investment advisory fees in 2019 by AdvisoryHQ shows that the average rate for assets over $30 million is 0.59% a year, which is significantly higher than Wetherby’s rate.
  • High level of customization: With just under 550 clients, Wetherby has 40 investment advisors on staff. The firm allows clients, including those who request impact investing, to place certain restrictions on the types of investments in their portfolios. Additionally, Wetherby will provide consultation and oversight to assets not held at the firm for no additional charge, unless asked to provide reporting or additional research on the assets.
  • Awards and accolades: Wetherby has frequently earned top rankings over the years. The firm’s founder, Deb Wetherby, landed the No. 5 slot on Forbes’ list of the Top 50 Best-In-State Wealth Advisors in 2020; No. 122 on Forbes’ list of America’s Top Wealth Advisors in 2019; and No. 19 on the magazine’s list of America’s Top Women Advisors in 2019. Other awards the firm has won include two entries on the list of the 2018 Top Wealth Advisor Moms by Working Mother magazine and appearances on B Lab’s lists of the Best for the World for Changemakers, Workers, Customers and Governance in 2019.

Wetherby Asset Management’s downsides

  • High account minimum: Wetherby’s high investment minimum requirement of $10 million makes its services out of reach for many investors. However, the firm will waive this minimum on a case-by-case basis, and it does currently serve just under 50 individuals who do not meet the SEC’s definition of high net worth individuals.
  • Small geographic footprint: With just two offices, Wetherby has a limited geographic reach. If you aren’t located in San Francisco or New York, it will be challenging to meet with your advisor in person, though the firm is registered in a number of other states if you’re open to working remotely with your advisor.
  • Potential conflict of interest: Debra Wetherby and two other owners of the firm also own minority ownership interests in a savings and loan holding company called National Advisors Trust Company (NATC). The firm intends to refer clients to NATC for trust and custodial services, contending that NATC provides these services for less than competitors. While the firm states in its Form ADV that it “will only recommend NATC to its clients when it is in the best interest of its clients,” this outside interest does present a potential conflict of interest as advisors may have an incentive to give the company additional work, thus referring its clients.

Wetherby Asset Management disciplinary disclosures

Wetherby has no disciplinary disclosures listed in its Form ADV. SEC-registered firms are required to provide prompt disclosures of any legal or disciplinary actions in their Form ADV to help current and prospective clients evaluate the firm. The type of legal and disciplinary events that must be disclosed include criminal and civil actions; administrative proceedings before a federal regulatory agency; and proceedings before a self-regulatory organization.

Wetherby Asset Management onboarding process

Prospective clients can contact Wetherby by filling out a form on its website, emailing the firm at [email protected] or calling (415) 399-9159.

Once clients choose to work with the firm, they will attend an official kickoff meeting during which advisors will get to understand the client’s goals and risk tolerance to create a suitable portfolio. The firm continually monitors clients’ investments and will make adjustments as necessary as a client’s goals and objectives change over time.

Clients have five business days after signing on with Wetherby to rescind the contract (though they will be required to settle transactions that Wetherby began on their behalf).

Is Wetherby Asset Management right for you?

For high net worth investors, Wetherby Asset Management offers a customizable investment management experience. Additionally, the firm’s requirement that wealth managers hold professional licenses and its clean disciplinary record can provide assurances to investors that they’ll be taken care of. What’s more, Wetherby’s emphasis on impact investing gives investors an option to participate in an increasingly popular investment style. However, the firm’s high account minimums leave out all but the very wealthy who are based near the firm’s offices in San Francisco and New York City from getting advice there.

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