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Short-Term vs. Long-Term Capital Gains: What the Difference Is and How to Minimize the Effect

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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When you sell an investment for more than you paid for it, your profit is considered a capital gain. If you’ve held the asset for a year or less, that’s a short-term gain. Any profit made after that time period is considered a long-term gain.

Capital gains qualify for special tax consideration, so it’s important to understand the differences between short-term versus long-term capital gains and the ways in which you can minimize their effect on your tax bill.

What are capital gains?

Capital gains represent the positive difference between the purchase price of an asset and the sales price of an asset. If you buy an investment for $100 and sell it for $150, for example, your capital gain is $50.

Capital gains apply if you sell assets such as stocks, bonds, jewelry, real estate, collectibles, precious metals or other investment vehicles for more than you paid for them.

Short-term vs. long-term capital gains tax

Capital gains are subject to federal taxes, but the tax rate depends on whether it is a short- or long-term capital gain. To quantify how long you’ve held an asset, you will typically count from after the day you acquired it and include the day you sold it.

  • Short-term capital gains tax: These gains are taxed as ordinary income, so they will be taxed in whatever federal income tax bracket you fall into.
  • Long-term capital gains tax: These gains are taxed at either 0%, 15% or 20%, depending on your annual income.

Short-term capital gains rates

Because short-term gains are taxed as ordinary income, they’ll be taxed at your marginal tax rate, as shown in the table below.

Short-Term Capital Gains Rates
Filing status10%12%22%24%32%35%37%
Single, taxable income over ...$0$9,875$40,125$85,525$163,300$207,350$518,400
Head of household, taxable income over ...$0$14,100$53,700$85,500$163,300$207,350$518,400
Married filing jointly, taxable income over ...$0$19,750$80,250$171,050$326,600$414,700$622,050
Married filing separately, taxable income over ...$0$9,875$40,125$85,525$163,300$207,350$311,025

Long-term capital gains rates

Meanwhile, your long-term capital gains rate will depend on your annual income and filing status, as indicated in the table below.

Long-Term Capital Gains Tax Rates
Filing status0%15%20%
Single$0 to $40,000$40,001 to $441,450$441,451 or more
Head of household$0 to $53,600$53,601 to $469,050$469,051 or more
Married filing jointly$0 to $80,000$80,001 to $496,600$496,601 or more
Married filing separately$0 to $40,000$40,001 to $248,300$248,301 or more

How to calculate capital gains taxes

Calculating your capital gains isn’t too complicated. Here’s how it works:

  • Consider how long you’ve held the asset: Figuring this out will help you determine whether it should be taxed as a long-term or short-term capital gain.
  • Figure your basis: This will typically be the purchase price plus any fees or commissions you paid for the asset.
  • Figure your realized amount: This will be the sales price less any fees or commissions paid.
  • Subtract one from the other: Subtract what you paid from your sales price to get the difference between the two numbers. If you sold the asset for more than you paid for it, this is a capital gain. If you sold the asset for less than you paid for it, it’s a capital loss.
  • Find your tax rate: Based on whether it’s a short- or long-term capital gain, find your tax rate based on your taxable income and the tables above.
  • Apply the tax rate to your gain: Multiply your capital gain by your tax percentage to determine how much tax you’ll pay on the proceeds.

An example of how capital gains taxes are calculated

Suppose you purchase 100 shares of stock priced at $50. Your total purchase price is $5,000. Two years later, you sell those 100 shares of stock for $75 apiece, for a total sale price of $7,500. Your capital gain (long-term, in this case) is $2,500.

Assuming you are married filing jointly, with taxable income of $150,000, your long-term capital gains tax rate would be 15%:

$2,500 (long-term gain) x 0.15 (tax rate) = $375 (capital gains tax payment)

This may vary based on any fees or commissions paid. Remember as well that an increase in value on an investment asset isn’t considered a capital gain until you sell the asset. If you purchase 100 shares of stock at $50 per share, and a year later, the stock is priced at $100 per share, there is no capital gain unless you sell the stock.

That said, you may occasionally receive a capital gain distribution if you own shares in a mutual fund that owns capital assets and sells them at a gain. That gain would be passed to investors in the mutual fund and considered income, reported on Form 1099-DIV.

Exceptions to typical capital gains tax rates

Capital gains on real estate

Capital gains on real estate work slightly differently than capital gains on other assets, and your tax bill will depend on whether the real estate is an investment or your primary residence.

Investment real estate: For any real estate other than your primary residence, you’ll pay capital gains taxes on any profit you realize when you sell the property. If you buy an investment property, such as a rental building for $400,000 and sell it five years later for $475,000, you have a capital gain of $75,000, and you will pay long-term capital gains taxes. If you’ve taken depreciation deductions that lower your cost basis, you’ll also be taxed on the depreciation, through what is known as depreciation recapture.

Owner-occupied real estate: There are different rules that apply to capital gains on your primary residence. The short- and long-term tax rules are the same, but each individual gets a $250,000 exemption on capital gains before they owe any taxes. If you’re a married couple, that means you can exclude up to $500,000 in capital gains when you sell your home. You can only claim this exemption once every two years.

It’s also worth noting that any improvements you’ve made to the home can be added to the basis. So if you bought a home for $200,000 and you’ve done $50,000 worth of home improvements, your new basis for purposes of capital gains calculation is $250,000.

In order for your home to qualify as your primary residence, you must have lived in and used it as your main home for at least two of the previous five years. If this is not the case, you are not eligible for the tax break.

Capital gains on collectibles

Some people buy and sell collectibles, such as art, coins, antiques or jewelry. Capital gains on collectibles held for more than a year are taxed at a maximum 28% rate, no matter what tax bracket you’re in.

Net investment income tax

Investors with a high net worth may also experience different capital gains tax rates. People with income over a certain threshold will see their capital gains subject to an additional 3.8% tax. The following people are subject to the additional tax:

Net Investment Income Tax Thresholds
Filing statusThreshold amount
Single, or head of household $200,000
Married filing jointly, or qualifying widow(er) with dependent child$250,000
Married filing separately$125,000

5 ways to minimize or avoid capital gains tax

Using tax loss harvesting strategies and talking to a financial advisor are one way to minimize your capital gains tax exposure. Capital gains taxes can take a big bite out of your investment gains, but there are a few strategies to lower your bottom line:

1. Use capital losses

If you have capital losses — meaning you sold an investment asset for less than you paid for it — you can use those losses to offset your capital gains for tax purposes. If you have $1,000 in capital gains and $1,000 in capital losses, for instance, you have no taxable capital gains. If you have more losses than gains, you can claim up to $3,000 of losses against your taxable income, carrying forward any excess losses to future years.

2. Hold your investments

Tax rates for long-term capital gains are lower than those for short-term capital gains. Holding investments past the one-year mark before selling will automatically result in lower taxes.

3. Take advantage of tax-deferred accounts

You don’t pay taxes on investment gains in a tax-deferred retirement account until you take distributions in retirement, and by then, you may be in a lower tax bracket. If you’re choosing an investment that might result in frequent gains or dividends, a tax-advantaged retirement account can be a good place in which to hold it. For example, you can trade stocks in a retirement account, such as an IRA, without having to worry about paying short-term capital gains.

4. Gift your winners

Charitably inclined? If you itemize deductions on your tax return, you can donate an asset with significant gains to the nonprofit organization of your choice. If you’ve got some low-basis stock that you’ve held for 20 years, you can gift those shares, get a tax benefit and avoid the capital gains you’d otherwise have if you sold it.

5. Execute a like-kind exchange

If you sell an investment property at a profit but buy another similar property (“like-kind”) soon thereafter, your capital gains on the first property won’t be recognized. You must identify the exchange within 45 days and complete the transaction within 180 days to qualify.

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Best Financial Advisors in Texas 2020: Fees and Services

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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Finding a financial advisor can be challenging given the number of financial advisors in Texas. Choosing the right advisor is a lot about figuring out the right fit, which means understanding your financial needs and goals, and how much you’re willing to spend.

That being said, we understand comparing firms and data points isn’t always easy difficult, so we compiled the most relevant information to help your decision-making process. To determine the best advisors in Texas, we only considered firms that manage individual accounts and offer financial planning services. We then ranked these firms based on assets under management (AUM), which serves as a general metric for the firm’s size, and client-to-advisor ratio, which indicates how much attention you may get as a client.

Our ranking is not indicative of which firm may be best for you, but it can help make the shopping experience easier. Take a look at our list below for the top firms in Texas and their key highlights:

Find a Financial Advisor near you

10 best financial advisors in Texas

Methodology and criteria

For our search, we looked at firms across the state of Texas. All of the firms considered are bound by fiduciary duty, registered with the U.S. Securities and Exchange Commission (SEC) and offer individual account management and financial planning services.

The firms that met this criteria were ranked based on their AUM and client-to-advisor ratio. These criteria are weighted equally in our scoring metrics. Firms with a higher AUM and lower client-to-advisor ratios garner higher scores. Our ranking system is designed to help compare firms but does not indicate which firm may be best for you.

In our reviews, we’ve listed several other key features that will help you determine which financial advisor is most fitting for your investing style and financial needs. It is important to note that we did not include disciplinary disclosures as a metric for our ranking. We have listed any disciplinary disclosures current as of October 12, 2020, but urge you to evaluate these firms on https://adviserinfo.sec.gov/.

1. Avalon Investment & Advisory

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  • Minimum assets required: $5 million
  • AUM: $8,440,689,324
  • Individual investor to advisor ratio: 36:1
  • Fee structure:
    • A percentage of AUM
    • Performance-based fees
    • Other (solicitation and client serving arrangement; model portfolios)
  • Firm phone number: (713) 238-2050
  • Headquarters address:
    2929 Allen Parkway Suite 3000
    Houston, TX 77019-7124

About Avalon Investment & Advisory

Avalon Investment & Advisory, which is officially registered with the SEC under the name Avalon Advisors, LLC, was founded in 2001. It is owned by firm employees, clients and entities that are part of The Cynosure Group, LLC, which is a Salt Lake City-based family office firm.

Avalon Investment & Advisory provides investment advice, asset allocation and related services to high net worth clients and institutional investors. The firm also acts as investment manager to five privately placed pooled investment funds.

Though clients generally need to invest at least $5 million for the firm to act as their investment advisor, it does serve some individual clients who do not qualify as high net worth individuals, defined by the SEC as those with at least $750,000 under management or a net worth of a least $1.5 million. This may be due in part to the fact that certain funds have lower account minimums.

Avalon is headquartered in Houston, with an additional office in San Antonio.

Avalon Investment & Advisory investing strategy

Avalon Investment & Advisory employs a combination of investment strategies, including long-term and short-term purchases, trading, short sales, margin transactions and option writing. The firm takes a long-term view of investing in an effort to provide higher after-tax returns, and seeks to maintain low volatility.

Avalon may suggest that clients invest in private funds, some of which are managed by unaffiliated managers and some of which are overseen by Avalon. During times of perceived higher market risk, Avalon may hold a significant part of an account’s assets in cash or cash equivalents. The firm generally doesn’t use hedging, options or derivatives and leverage.

Avalon Investment & Advisory disciplinary disclosures

Neither Avalon Investment & Advisory nor any of its supervised persons have been involved in any legal or disciplinary events, which would include criminal or civil action in court, and administrative proceedings before the SEC or any other regulatory agency. You can find more information on the firm’s IAPD page.

2. Tolleson Private Wealth Management

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  • Minimum assets required: $10 million
  • AUM: $6,630,904,897
  • Individual investor to advisor ratio: 3:1
  • Fee structure:
    • A percentage of AUM
    • Hourly charges
    • Fixed fees
  • Firm phone number: (214) 252-3250
  • Headquarters address:
    5500 Preston Road, Suite 250
    Dallas, TX 75205

About Tolleson Private Wealth Management

Tolleson Private Wealth Management was founded in 2000 and is owned by Tolleson Wealth Management, which is majority owned and controlled by John Tolleson, who serves as the firm’s executive chairman. The firm started as a single-family office to serve the Tolleson family, and it now offers multifamily office services to high net worth individuals. It generally requires a minimum account size of $10 million.

Offerings include strategic wealth and investment management, tax planning and bookkeeping, private banking, trust and estate help and assistance with philanthropy and family learning. The firm is located in Dallas.

Tolleson Private Wealth Management investing strategy

Tolleson Private Wealth Management works with each client to create a plan for their investments. The firm then researches and evaluates investments using quantitative data, qualitative information and/or interviews with investment managers. If a client needs discretionary bond management services, the firm evaluates fixed income securities based on issuer ratings, liquidity of securities and sector and geographic diversification.

Tolleson Private Wealth Management doesn’t engage in classic security analysis, meaning it doesn’t assess the expected performance of investments. Instead, the firm views itself as an overall portfolio manager, with advisors focused on helping clients set investment goals and determine an asset allocation strategy, which the firm then implements.

Tolleson Private Wealth Management disciplinary disclosures

Tolleson Private Wealth Management has no disciplinary disclosures reported on its Form ADV. For reference, the SEC requires all registered investment advisors to disclose any civil, criminal or regulatory actions against the firm, its employees or its affiliates within the last 10 years. For more information on the firm, visit its IAPD page.

3. Retirement Planners of America

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  • Minimum assets required: None
  • AUM: $4,431,534,007
  • Individual investor to advisor ratio: 267:1
  • Fee Structure:
    • A percentage of AUM
  • Firm phone number: (469) 246-3627
  • Headquarters address:
    2820 Dallas Parkway Suite 300
    Plano, TX 75093

About Retirement Planners of America

Retirement Planners of America was established in 2011. The firm is principally owned by the four senior advisors on its team.

Retirement Planners of America offers financial planning, retirement planning, investment management, family legacy planning and income tax planning to individuals. It predominantly serves individual investors who do not meet the SEC’s definition of high net worth, though a sizable portion of its clients are considered high net worth individuals. The firm also works with pension and profit-sharing plans.

Headquartered in Plano, the firm has several locations in Texas, as well as offices in California, Arizona, Oklahoma and Utah.

Retirement Planners of America investing strategy

Retirement Planners of America primarily recommends mutual funds, variable annuities and fixed annuities for its clients. It may also use equities and ETFs. Clients are either assigned to one of the firm’s mutual fund asset allocation models or their assets may be invested in separately purchased mutual funds and/or ETFs, depending on their investment objectives.

The firm employs several methods of analysis to determine its investment advice. This may include charting price and volume information, analyzing individual companies and their industry groups, studying past price patterns and trends, evaluating recurring price patterns and trends and purchasing securities for long-term holds. Potential clients should note that tax efficiency is generally not the firm’s primary consideration in the management of assets, and thus the firm recommends consulting with a tax professional on these matters.

Retirement Planners of America disciplinary disclosures

There are no disciplinary disclosures reported on Retirement Planners of America’s Form ADV paperwork, which includes any legal or disciplinary events that are material to a client’s evaluation of the business or the integrity of its management. You can find more information about the firm on its IAPD page.

4. RGT Wealth Advisors

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  • Minimum assets required: $3 million
  • AUM: $4,335,439,040
  • Individual investor to advisor ratio: 16:1
  • Fee structure:
    • A percentage of AUM
    • Hourly charges
    • Fixed fees
    • Performance-based fees
  • Firm phone number: (214) 360-7000
  • Headquarters address:
    5950 Sherry Lane, Suite 600
    Dallas, TX 75225

About RGT Wealth Advisors

RGT Wealth Advisors went into business in 1985, and is owned by current and former managing directors at the firm. The company has one office in Dallas.

RGT Wealth Advisors provides investment management, financial planning and family office services. High net worth individuals make up the majority of its client base, though it also works with individual investors who do not meet this definition as well as trusts, estates, charitable organizations and private funds.

Working with RGT Wealth Advisors generally requires a minimum investment of $3 million, though the firm may waive this requirement at its discretion.

RGT Wealth Advisors investing strategy

RGT Wealth Advisors takes a long-term approach to portfolio management, focusing on creating a diversified portfolio of mutual funds, ETFs and individual securities. Portfolios may also include investments in hedge funds, private equity investments or other partnerships when appropriate.

The firm manages each client’s portfolio in accordance with their investment policy statement, created at the start of the relationship based on the client’s long-term goals, risk tolerance and liquidity needs. This policy statement is what will ultimately determine a client’s precise asset allocation.

RGT Wealth Advisors disciplinary disclosures

RGT Wealth Advisors reports no disciplinary disclosures, which can include any civil, criminal or regulatory events from the past decade involving the firm or its affiliates or employees. The SEC requires that all registered investment advisors report such incidents in their Form ADV paperwork. For more information on RGT Wealth Advisors, visit the firm’s IAPD page.

5. Linscomb & Williams

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  • Minimum assets required: $1 million
  • AUM: $3,844,536,498
  • Individual investor to advisor ratio: 215:1
  • Fee structure:
    • A percentage of AUM
    • Hourly charges
    • Fixed fees
  • Firm phone number: (713) 840-1000
  • Headquarters address:
    1400 Post Oak Blvd., Suite 1000
    Houston, TX 77056

About Linscomb & Williams

Established in 1971, Linscomb & Williams is a wholly owned subsidiary of Cadence Bank, which is headquartered in Birmingham, Ala. The firm offers financial planning, portfolio management, general financial consulting and retirement plan services. Though it generally requires an account of at least $1 million, the firm serves individual investors who do and do not meet the SEC’s definition of high net worth, as well as trusts, estates, charitable organizations, retirement plans and businesses.

Linscomb & Williams’ main office is located in Houston, but it also has offices in the Lonestar State in Austin, The Woodlands and Fredericksburg. It also has a location in Birmingham, Ala. Additionally, the firm has a branch in Atlanta that operates as Wealth & Pension Services Group, a registered investment advisory firm that Linscomb & Williams purchased in 2019.

Linscomb & Williams investing strategy

Linscomb & Williams develops an investment plan for each client based on their risk tolerance, return goals, liquidity needs and any special factors that may apply to their situation. The firm uses a variety of investments to implement the plan, including individual stocks, mutual funds, ETFs, various kinds of bonds and cash and equivalents.

Linscomb & Williams relies on internal and external research to choose investments for clients, carried out by its 13-member investment committee helmed by its chief investment officer and the committee’s chairman. Its recommendations generally emphasize long-term purchases rather than short-term trading.

Linscomb & Williams disciplinary disclosures

Linscomb & Williams has no disciplinary events to report. This includes any civil, regulatory or criminal actions from the last 10 years related to the firm, its employees or its affiliates. For more information or to view the firm’s Form ADV paperwork filed with the SEC, visit its IAPD page.

6. TCG Advisors, LP

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  • Minimum assets required: Not specified
  • AUM: $3,602,908,16
  • Individual investor to advisor ratio: 15:1
  • Fee structure:
    • A percentage of AUM
    • Hourly charges
    • Fixed fees
    • Performance-based fees
  • Firm phone number: (512) 600-5221
  • Headquarters address:
    900 South Capital of Texas Highway, Suite 350
    Austin, TX 78746

About TCG Advisors, LP

TCG (which stands for Trusted Capital Group) Advisors was founded in 2000 by its current CEO John Pesce, and its chairman, Mike Cochran. It began operating in 2001. The firm is a privately held partnership owned by TCG Group Holdings, LLP, of which Pesce is the largest partner, as well as Total Compensation Group Investment Advisory Services Management, LLC.

The firm provides investment advisory services, financial and retirement plans and access to robo-advisory services. It serves a wide array of clients, from individuals to pension and profit-sharing plans, trusts, businesses, individual retirement accounts and company retirement plans.

Headquartered in Austin, the firm also has an office in Fort Worth.

TCG Advisors, LP investing strategy

TCG Advisors has designed and manages eight discretionary investment portfolios for its individual clients. These portfolios use a mix of growth equities (usually ETFs and some mutual funds) and fixed income investments (bonds, fixed income ETFs, bond funds and other cash equivalent funds), and range from a speculative portfolio invested 100% in growth equities to a conservative preservation portfolio invested 100% in fixed income investments.

The firm aims to achieve higher returns through a well-diversified asset mix while managing risk, and thus discusses each client’s tolerance for risk when assisting them in deciding which portfolio is right for them. In addition to risk tolerance, TCG takes into account clients’ financial situation, investment objectives, time horizon and other needs when designing their portfolios.

TCG Advisors, LP disciplinary disclosures

There is no disciplinary information to disclose about TCG Advisors, its employees or its advisory affiliates. The SEC requires that all registered investment advisors report any such actions from the last decade in their Form ADV paperwork. To view the firm’s Form ADV or get more information, visit its IAPD page.

7. CH Investment Partners, LLC

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  • Minimum assets required: None, although $40 million is generally expected
  • AUM: $3,575,237,572
  • Individual investor to advisor ratio: 4:1
  • Fee structure:
    • A percentage of AUM
    • Fixed fees
    • Performance-based fees
  • Firm phone number: (214) 661-8207
  • Headquarters address:
    3953 Maple Avenue, Suite 250
    Dallas, TX 75219

About CH Investment Partners, LLC

CH Investment Partners, LLC was established in 2019 and acts as an investment advisor to high net worth individuals and families, among other entities, with the goal being for each client and/or their affiliates to ultimately have at least $40 million in assets under management, advisement or supervision. The firm was originally part of Crow Holdings Capital – Investment Partners, but it is now primarily owned by its co-presidents, Mike Silverman and Kirk Rimer.

Services the firm provides include advisory services, consulting, financial planning, family office services and other non-advisory services. It also provides services to affiliated pooled investment vehicles.

CH Investment Partners is headquartered in Dallas, but it has another office in Tulsa, Okla.

CH Investment Partners, LLC investing strategy

CH Investment Partners offers a variety of actively managed “opportunistic investment strategies,” chosen specifically for the ultrahigh net worth set. These include global equities, hedge funds, private equity and direct investments, master limited partnerships, real estate and fixed income allocations.

The firm generally recommends that clients invest or allocate assets to one or more of the funds that it advises and manages, along with certain underlying funds and/or underlying accounts. It may also invest directly in securities, financial instruments, private investments and other assets. In general, client portfolios are built in accordance with their investment advisory agreements, set out at the beginning of the relationship, as well as the client’s investment guidelines and restrictions, financial situation, objectives and risk tolerance.

CH Investment Partners, LLC disciplinary disclosures

CH Investment Partners has no disciplinary disclosures. This means its record is free of any civil, regulatory or criminal actions involving the firm, its employees or its affiliates. The SEC requires all registered investment advisors to report such actions on their Form ADV paperwork. For more information or to see the firm’s Form ADV, visit its IAPD page.

8. Frontier Investment Management Co

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  • Minimum assets required: $5,000
  • AUM: $3,286,843,011
  • Individual investor to advisor ratio: 50:1
  • Fee structure:
    • A percentage of AUM
    • Hourly charges
    • Fixed fees
    • Commissions
  • Firm phone number: (972) 934-2590
  • Headquarters address:
    8401 N. Central Expwy., Suite 300
    Dallas, TX 75225

About Frontier Investment Management Co.

Founded in 1994, Frontier Investment Management is primarily owned by Gary Schoen, Richard Sowden and Brian Hattendorf, all of whom are principals at the firm. Schoen also serves as the firm’s president.

Frontier provides services for individuals — with a larger pool of high net worth individuals than otherwise — as well as institutions. The firm offers investment management, retirement plan management and consulting and financial planning services, as well as an automated online investment management platform aimed at emerging investors called FrontierNEXT. Additionally, Frontier offers specific services for medical professionals and women with Frontier Medical and Frontier Women.

The firm is headquartered in Dallas with locations in 19 other cities across the U.S.

Frontier Investment Management Co investing strategy

Frontier Investment Management tailors its advice for clients based on their financial goals, objectives, risk tolerance and constraints. In the management process, the company helps the client to determine an appropriate asset allocation, selects specific investment vehicles through a proprietary screening process and provides ongoing portfolio monitoring, evaluation and rebalancing.

The firm primarily invests client assets in stocks, bonds, mutual funds and/or ETFs. Investment strategies used may include long-term purchases, short-term purchases, trading, option strategies, short sales and margin transactions.

Frontier Investment Management Co. disciplinary disclosures

Frontier Investment Management marks one disciplinary disclosure on its Form ADV related to an advisory affiliate’s suspension by the Indiana State Bar Association for failing to pay annual attorney registration fees. According to the firm’s Form ADV, the individual moved out of state and did not intend to practice law in Indiana.

You can find further information about the event and Frontier Wealth Management by visiting the firm’s IAPD page.

9. Southern Wealth Management LLP

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  • Minimum assets required: $1 million
  • AUM: $3,118,522,059
  • Individual investor to advisor ratio: 65:1
  • Fee structure:
    • A percentage of AUM
    • Hourly charges
    • Fixed fees
    • Commissions
  • Firm phone number: (972) 661-4600
  • Headquarters address:
    5005 LBJ Freeway, Suite 1313
    Dallas, TX 75244

About Southern Wealth Management LLP

Southern Wealth Management LLP started offering investment advisory, financial planning and tax services in 2005. The firm is principally owned by Richard Jones, who is managing partner at the firm, as well as Thomas Gile and Michael Olson, both of whom are partners.

The firm primarily serves high net worth individuals, though it also works with trusts, retirement and pension plans, charitable organizations and other entities. Clients typically must invest at least $1 million to access the firm’s investment advisory services.

Southern Wealth Management is headquartered in Dallas. It has additional offices in San Antonio and New Orleans.

Southern Wealth Management LLP investing strategy

Southern Wealth Management generally creates portfolios using individual equities, bonds, no-load and load-waived mutual funds and other investment products. When appropriate, the firm may recommend the use of option writing, but only when consistent with the client’s stated risk tolerance.

Southern Wealth Management also provides access to investment service programs in which client accounts are managed by independent, third-party investment advisors. The firm will base its recommendations on factors including the client’s account size, risk tolerance and opinion on the programs. as well as the investment philosophy of the third party.

Southern Wealth Management LLP disciplinary disclosures

Southern Wealth Management has not been involved in any disciplinary events, which includes any criminal or civil actions in court, and any administrative proceedings before a regulatory agency. Registered investment advisors are required by the SEC to report such incidents within the last decade involving the firm, its employees or its affiliates on their Form ADV paperwork. To view the firm’s Form ADV or get more information, visit its IAPD page.

10. Level Four Advisory Services

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  • Minimum assets required: Varies by program, starting at $5,000
  • AUM: $2,812,483,913
  • Individual investor to advisor ratio: 44:1
  • Fee Structure:
    • A percentage of AUM
    • Hourly charges
    • Fixed fees
    • Other (solicitor fees)
  • Firm phone number: (866) 834-1040
  • Headquarters address:
    12400 Coit Road, Suite 700
    Dallas, TX 75251

About Level Four Advisory Services

Level Four Advisory Services, which has provided financial services since 2005, is owned and controlled by the Level Four Group, a holding company that is ultimately owned by the accounting firm Carr, Riggs & Ingram Capital, L.L.C.

The firm offers asset management, financial planning, risk management business services, corporate retirement plans and other services. Its clients are predominantly individual investors who do not meet the SEC’s definition of high net worth (defined as those with at least $750,000 under management or a net worth of at least $1.5 million). However, it does also serve high net worth individuals, pension and profit-sharing plans, businesses and charitable organizations, among other entities. The firm specializes in serving those in the sports and entertainment industries as well as business owners.

Level Four’s headquarters are in Dallas, but it has 70 additional offices across the country.

Level Four Advisory Services investing strategy

Level Four Advisory Services has no unifying investment strategy. Rather, the investment strategy may differ from advisor to advisor, as do the analysis methods used.

Clients have the option of investing in proprietary portfolios designed by Level Four. Generally speaking, portfolios will be designed based on the following objectives:

  • Income with capital preservation
  • Income with moderate growth
  • Growth with income
  • Growth
  • Aggressive growth

Level Four Advisory Services disciplinary disclosures

Level Four Advisory Services has not been involved in any disciplinary events. Disciplinary events include criminal or civil actions in court, and any administrative proceedings before a regulatory agency. For more information, visit the firm’s IAPD page.

Financial advisors in Texas: FAQs

The tax situation in Texas is pretty low-key. It is one of several states that has no income tax, and there’s no state inheritance tax or estate tax either. You are, however, still subject to federal estate and inheritance tax.

A fee-only financial advisor has a few advantages. First, they don’t accept fees or commissions for the products they sell and solely earn money from the fees their clients pay, so there’s less chance of a conflict of interest. Additionally, most fee-only advisors are fiduciaries, meaning they are required to put your best interests first.

There are no specific requirements for financial advisors in the state of Texas, which is why experts recommend finding a financial professional with an industry certification to indicate that they’ve been trained in the field. Certified financial planners (CFP), for instance, are required to complete an educational program, pass an exam and have a certain level of experience to earn the certification.

No, not all financial advisor firms specialize in retirement planning. It’s a good idea to look for a CFP or an advisor with a certification signifying a specialization in retirement planning if you know this is an area where you’ll need help. Some certifications that have a retirement planning focus include a chartered retirement plans specialist (CRPS), a retirement income certified professional (RICP) or a chartered retirement planning counselor (CRPC), for example.

Make sure you check any “senior” or “retirement” related designations with the Financial Industry Regulatory Authority (FINRA), which lists all of them on their website. Some designations can be acquired after no more than a weekend seminar and some are even fabricated.

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Best Financial Advisors in California 2020: Fees and Services

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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Choosing a financial advisor can be challenging, given the number of financial advisors in California. Finding the right advisor is a lot about figuring out the right fit, which means understanding your financial needs and goals and how much you’re willing to spend.

That being said, we understand comparing firms and data points can be difficult, so we compiled the most pertinent information to help guide your decision. To determine the best advisors in California, we only considered firms that manage individual accounts and offer financial planning services. We then ranked these firms based on assets under management (AUM), which serves as a general metric for the firm’s size, and client-to-advisor ratio, which indicates how much attention you may get as a client.

Our ranking is not indicative of which firm may be best for you, but it can help make the shopping experience easier. Take a look at our list below for the top firms in California and their key highlights:

10 best financial advisors in California

Methodology and criteria

For our search, we looked at firms across the state of California. All of the firms considered are bound by fiduciary duty, registered with the U.S. Securities and Exchange Commission (SEC) and offer individual account management and financial planning services.

The firms that met this criteria were ranked based on their AUM and client-to-advisor ratio. These criteria are weighted equally in our scoring metrics. Firms with a higher AUM and lower client-to-advisor ratios garner higher scores. Our ranking system is designed to help compare firms but does not indicate which firm may be best for you.

In our reviews, we’ve listed several other key features that will help you determine which financial advisor is most fitting for your investing style and financial needs. It is important to note that we did not include disciplinary disclosures as a metric for our ranking. We have listed any disciplinary disclosures current as of October 8, 2020, but urge you to evaluate these firms on https://adviserinfo.sec.gov/.

1. Global Retirement Partners LLC

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  • Minimum assets required: None
  • AUM: $67,728,457,653
  • Individual investor to advisor ratio: 24:1
  • Fee structure:
    • A percentage of AUM
    • Hourly charges
    • Fixed fees
  • Firm phone number: (415) 526-2750
  • Headquarters address:
    4340 Redwood Highway, Suite B-60
    San Rafael, CA 94903

About Global Retirement Partners LLC

Global Retirement Partners (GRP) describes itself as a “retirement plan consulting firm.” It has been in business since 2014 and is owned by HUB International Limited. The firm is headquartered in San Rafael and has more than 80 offices around the country.

Global Retirement Partners provides services to individuals, pension and profit-sharing plans, trusts, corporations and other businesses. The firm highlights its role in the retirement plan industry, but it also offers solutions to individuals looking for services like investment management and guidance on insurance or charitable giving.

Global Retirement Partners LLC investing strategy

Global Retirement Partners allows each of its advisors to adhere to their own individualized investment strategy and philosophy. That being said, the firm generally takes each client’s objectives into consideration when building their portfolio and uses the following tactics to formulate client recommendations:

  • Fundamental analysis: Looks at economic and financial factors to determine if a company is underpriced or overpriced
  • Charting: Attempts to identify when the market is moving up or down and to predict how long the trend may last
  • Technical analysis: Analyzes past market movements to try to recognize recurring patterns
  • Cyclical analysis: Measures stock movements against the market
  • Mutual fund and ETF analysis: Looks at mutual fund and exchange-traded fund (ETF) managers and underlying investments

Investment strategies the firm’s advisors may use include buying securities for both the short and long term, and buying securities for quick trades when they predict brief price swings.

Global Retirement Partners LLC disciplinary disclosures

Global Retirement Partners LLC has not been involved in any legal or disciplinary events in the last 10 years. Disciplinary disclosures include criminal or civil actions in court and administrative proceedings before a regulatory agency involving either the firm or its employees or affiliates. For more information, visit the firm’s IAPD page.

2. NFP Retirement Inc.

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  • Minimum assets required: $25,000
  • AUM: $59,214,796,526
  • Individual investor to advisor ratio: 15:1
  • Fee structure:
    • A percentage of AUM
    • Hourly charges
    • Fixed fees
  • Firm phone number: (949) 460-9898
  • Headquarters address:
    120 Vantis Drive, Suite 400
    Aliso Viejo, CA 92656

About NFP Retirement Inc.

NFP Retirement Inc. is a registered investment advisor owned by NFP Corp., a brokerage and consulting firm. The firm provides retirement plan consulting, investment advice, employee plan and investment education, asset allocation services and plan design guidance to individuals, among other services.

The firm’s clients include individuals, trusts, estates, retirement plan sponsors and business entities. Founded in 2000, NFP Retirement is headquartered in California but has offices throughout the U.S., as well as in Canada, Puerto Rico and the United Kingdom.

NFP Retirement Inc. investing strategy

NFP Retirement’s investing strategy takes into consideration a client’s time horizon, cash flow needs, risk tolerance and return expectations, alongside additional factors like the state of the markets. The firm allocates assets according to modern portfolio theory, an investment strategy that favors diversification in order to maximize returns while minimizing risk. NFP Retirement uses both proprietary and third-party research to inform its decisions.

In general, clients’ portfolios will contain mutual funds and ETFs, and occasionally individual securities. The firm does not engage in frequent trading.

NFP Retirement Inc. disciplinary disclosures

NFP Retirement Inc. does not report any legal or disciplinary events on its Form ADV paperwork filed with the SEC. Disciplinary events include criminal or civil actions in court and administrative proceedings before a regulatory agency. For further information, visit the firm’s IAPD page.

3. Hall Capital Partners LLC

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  • Minimum assets required: None specified, but minimum annual fee of $400,000
  • AUM: $41,599,805,285
  • Individual investor to advisor ratio: 4:1
  • Fee structure:
    • A percentage of AUM
    • Fixed fees
    • Performance-based fees
  • Firm phone number: (415) 288-0544
  • Headquarters address:
    One Maritime Plaza, Sixth Floor
    San Francisco, CA 94111

About Hall Capital Partners LLC

Hall Capital Partners is a privately owned firm with offices in San Francisco and New York. It was founded in 1994 by Kathryn A. Hall, who is currently co-chair of the firm and a member of its Executive Committee and Investment Review Committee.

The firm was initially established to manage the portfolios of a few family offices and their private foundations. Today, it builds and manages multi-asset class portfolios for families, endowments, foundations and other clients. Although there is no minimum account size requirement, the majority of Hall Capital Partners’ clients have over $100 million in investment assets.

Hall Capital Partners LLC investing strategy

Hall Capital Partners invests clients’ funds globally and for the long term, targeting investment managers who are “flexible and opportunistic.” The firm’s goal is to create concentrated but diversified portfolios using asset classes including cash and fixed income, global equities, hedge funds, private equity, real assets and hybrid investments.

Clients actively invest with a selection of underlying managers who are in charge of private funds, separate accounts and certain mutual funds. Through the firm, clients have access to:

  • Customized global multi-asset class portfolios: Portfolios designed according to client-specific guidelines
  • HCP pooled vehicles: Unregistered funds of funds managed by Hall Capital or its affiliates
  • Specialized mandates: Investments in a specific asset class, such as hedge funds, private equity or real assets

The company’s research group reviews, evaluates and conducts due diligence on potential and existing underlying managers, and also tracks the performance of a range of sectors and markets.

Hall Capital Partners LLC disciplinary disclosures

Hall Capital Partners has not been involved in any legal or disciplinary events over the last decade. For reference, disciplinary disclosures include any criminal, civil or regulatory actions against the firm, its employees or its affiliates. You can find more information by visiting the firm’s IAPD page.

4. Kayne Anderson Rudnick Investment Management, LLC

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  • Minimum assets required: $1 million
  • AUM: $33,006,398,189
  • Individual investor to advisor ratio: 34:1
  • Fee structure:
    • A percentage of AUM
    • Fixed fees
    • Performance-based fees
  • Firm phone number: (800) 231-7414
  • Headquarters address:
    1800 Avenue of the Stars, Second Floor
    Los Angeles, CA 90067

About Kayne Anderson Rudnick Investment Management, LLC

Kayne Anderson Rudnick Investment Management is owned by Virtus Investment Partners, a publicly traded asset management business, and has been an SEC-registered investment advisor since 1985. The firm is headquartered in Los Angeles, though it also has additional offices in the state of California (San Francisco, Newport Beach and Westlake Village), as well as locations in several other states.

Kayne Anderson Rudnick offers investment management and wealth advisory services, including financial planning and executive services. Its clients include individuals, charitable organizations and endowments, religious and professional organizations, pension and profit-sharing plans, corporations and other entities, among other institutional client types. While it generally requires $1 million to access the firm’s wealth advisory services, the minimum amount of assets required for wrap program accounts ranges from $50,000 to $250,000.

Kayne Anderson Rudnick Investment Management, LLC investing strategy

Kayne Anderson Rudnick invests mainly in equity securities that are traded on or in a recognized exchange or market; there is a focus on companies that are consistently growing and highly profitable, with low debt and rising cash flows. To pinpoint the best options, Kayne Anderson Rudnick conducts extensive research to identify companies whose business models provide competitive protections, as well as control over their markets. The firm’s principal portfolio approach includes large-cap equities and small- to mid-cap equities, though occasionally Kayne Anderson Rudnick also invests in pre-IPO private placement securities.

The firm also invests in a selection of high-quality fixed-income investments: These include U.S. treasuries, government agency bonds, mortgage-backed securities, corporate bonds and municipal bonds (focusing on intermediate-term bonds). Clients have access to both taxable and tax-free fixed-income strategies.

Kayne Anderson Rudnick Investment Management, LLC disciplinary disclosures

Kayne Anderson Rudnick Investment Management reports one disciplinary disclosure on its Form ADV paperwork. In July 2018, the Financial Supervisory Authority of Norway levied a fine of about $18,500 against the company after two notifications of large share ownership in a Norwegian company weren’t made within proper Norwegian time requirements. For more information, visit the firm’s IAPD page.

5. Comprehensive Financial Management LLC

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  • Minimum assets required: None specified
  • AUM: $17,061,855,642
  • Individual investor to advisor ratio: 1:1
  • Fee structure:
    • Hourly charges
    • Performance-based fees
  • Firm phone number: (408) 358-3316
  • Headquarters address:
    720 University Ave., Suite 200
    Los Gatos, CA 95032

About Comprehensive Financial Management LLC

Comprehensive Financial Management was started in 1986. The firm is managed by three partners and is wholly owned by its executives. It has one office in Los Gatos, California.

Comprehensive Financial Management offers a range of services to high net worth individuals and families, including investment management, tax management, estate planning, lifestyle asset acquisition, philanthropic management and risk management consulting. Additionally, the firm can manage assets for its clients’ trusts, foundations and limited liability companies.

Comprehensive Financial Management LLC investing strategy

Comprehensive Financial Management takes into account return requirements, risk tolerance, timing and size of liquidity needs and tax status, as well as “overall life situation,” to create a customized investment program for their clients. Portfolio design is determined based on a combination of computer programs, internal models, scenario-based analysis and qualitative discussions.

As investment strategies, the firm uses capital preservation, capital growth or current income generation — or a balance among the three. The firm invests using stocks, bonds, mutual funds, ETFs, real estate investment trusts (REITs), master limited partnerships (MLPs), hedge funds and private equity and private credit funds. It will also suggest strategies that speak to estate planning and intergenerational transfer of wealth.

Comprehensive Financial Management LLC disciplinary disclosures

Comprehensive Financial Management has no disciplinary information to report. For reference, disciplinary disclosures include criminal or civil actions in court and administrative proceedings before a regulatory agency involving the firm, its employees or its affiliates. For further information on the firm, visit its IAPD page.

6. Aspiriant, LLC

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  • Minimum assets required: $1.5 million
  • AUM: $12,758,731,000
  • Individual investor to advisor ratio: 17:1
  • Fee structure:
    • A percentage of AUM
    • Hourly charges
    • Fixed fees
  • Firm phone number: (415) 371-7800
  • Headquarters address:
    11100 Santa Monica Blvd., Suite 600
    Los Angeles, CA 90025

About Aspiriant LLC

Aspiriant LLC was founded in 2008 and is owned by multiple holding companies with the purpose of holding shares of Aspiriant, whose employees in turn hold shares in the holding companies. The firm is headquartered in Los Angeles, with offices in 10 other cities throughout the country, including four additional offices in California.

Aspiriant offers investment management, comprehensive wealth management and family office services to individuals and families. Though its individual client base is predominantly high net worth individuals (defined by the SEC as those with at least $750,000 under management or a net worth of $1.5 million), it also serves individuals who do not meet this definition, as well as various institutional clients.

Aspiriant LLC investing strategy

Based on a client’s financial circumstances and investment goals, Aspiriant designs a portfolio with an asset allocation intended to meet their needs. Portfolios may include equities, mutual funds, ETFs, exchange-traded notes, private partnerships, bonds and cash-equivalents, as well as other instruments. Additionally, the firm may recommend Aspiriant Affiliated mutual funds, for which Aspiriant acts as investment advisor.

Aspiriant invests for the long term, with an eye toward how the market will perform over the next seven to 10 years. Portfolios targeting the lowest risk profile are more heavily weighted in fixed income investments, while those that target higher risk profiles will usually focus on stocks and other asset classes with a higher expected return.

Aspirant LLC disciplinary disclosures

Aspiriant has no disciplinary actions to disclose. Disciplinary events include any criminal, civil or regulatory actions against the firm, its employees or its affiliates over the last decade. The SEC requires all registered investment advisors to disclose these events in their Form ADV paperwork. For more information, visit the firm’s IAPD page.

7. Personal Capital Advisors Corporation

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  • Minimum assets required: $100,000
  • AUM: $12,240,728,055
  • Individual investor to advisor ratio: 93:1
  • Fee structure:
    • A percentage of AUM
  • Firm phone number: (855) 855-8005
  • Headquarters address:
    250 Montgomery St., Suite 700
    San Francisco, CA 94104

About Personal Capital Advisors Corporation

Personal Capital Advisors Corporation was founded in 2010 and is a wholly owned subsidiary of Personal Capital Corporation, which, through several layers of ownership, is ultimately owned by the Power Corporation of Canada, which is controlled by the Desmarais Family Residuary Trust. The firm is headquartered in San Francisco, with additional offices in Denver, Dallas, Atlanta and Redwood City, Calif.

The firm offers investment management services via a combination of financial advisors and proprietary technology, and access to advisory services depends on how much you have invested. Although $100,000 is technically the minimum you can invest, the company offers different tiers of service, which require different minimum investment amounts, ranging up to $1 million for its highest level of service.

Personal Capital Advisors Corporation offers advisory services primarily to individuals, though it also serves a number high net worth individuals, defined by the SEC as those with at least $750,000 under management or a net worth of $1.5 million. Additionally, the firm works with corporations and other business entities, as well as charitable organizations.

Personal Capital Advisors Corporation investing strategy

Personal Capital designs portfolios using real-time financial account data, information from the client’s investor profile and Monte Carlo projections, a mathematical model used to project the chances of reaching financial or retirement goals under a range of possible market scenarios. Within portfolios, the company emphasizes asset allocation and diversification using U.S. equities and a mix of low-cost ETFs.

Portfolios are monitored by a combination of financial advisors and portfolio management software, and are periodically rebalanced. Even without hiring Personal Capital to manage your assets, however, the firm offers the ability to link your financial accounts to its unique online dashboard to get a holistic view of your money. This dashboard is also available by downloading the Personal Capital app, available for both iOS and Android devices.

Personal Capital Advisors Corporation disciplinary disclosures

Personal Capital Advisors Corporation discloses disciplinary history on its Form ADV paperwork related to an incident within the last 10 years, in which a state regulatory agency entered an order against one of the firm’s affiliates, Great-West Life & Annuity Insurance Company, in connection to investment activity. Specifically, the Kentucky Department of Insurance took issue with the company’s marketing and advertising practices around certain life insurance products, resulting in a fine of $2,500.

For more information, view the firm’s IAPD page.

8. Advanced Research Investment Solutions, LLC

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  • Minimum assets required: $10 million
  • AUM: $12,072,556,000
  • Individual investor to advisor ratio: 12:1
  • Fee Structure:
    • A percentage of AUM
    • Fixed fees
  • Firm phone number: (424) 283-3800
  • Headquarters address:
    10635 Santa Monica Blvd., Suite 240
    Los Angeles, CA 90025

About Advanced Research Investments Solutions LLC

Advanced Research Investments Solutions LLC was formed in 2014. It is owned by Evoke Holdings, LLC, which is primarily owned by David Hou. Evoke Holdings is also the parent company to Evoke Wealth, where Hou serves as managing partner.

The firm offers investment management and retirement plan and investment consulting services to individuals, as well as family offices, pension and profit-sharing plans and other types of entities. Advanced Research Investments Solutions generally requires a minimum portfolio of $10 million, and although the firm may accept clients with less to invest, all of its individual clients meet the SEC’s definition of high net worth individuals.

The firm’s only office location is in Los Angeles.

Advanced Research Investments Solutions LLC investing strategy

Advanced Research Investments Solutions’ investing approach relies on both asset allocation and active management. The firm doesn’t lean much on a traditional asset allocation of 60% equities and 40% bonds, however. It notes a belief that portfolios with this mix only do well when conditions favor equities — i.e., during periods of rising growth and/or falling inflation. Instead, the firm relies on active managers who work to build asset allocations that balance risk exposure to different economic environments.

Depending on a client’s investment goals, Advanced Research Investments Solutions generally recommends that clients allocate their assets among an assortment of independent investment managers, investment funds, mutual funds, ETFs, individual debt and equity securities and options.

Advanced Research Investments Solutions LLC disciplinary disclosures

Advanced Research Investments Solutions has no disciplinary disclosures. Disciplinary events include criminal or civil actions in court and administrative proceedings before a regulatory agency involving the firm, its employees or its affiliates over the last 10 years. You can find more information on the firm’s IAPD page.

9. Jordan Park Group LLC

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  • Minimum assets required: $50 million
  • AUM: $11,683,637,375
  • Individual investor to advisor ratio: 2:1
  • Fee structure:
    • A percentage of AUM
    • Fixed fees
    • Performance-based fees
  • Firm phone number: (415) 417-3000
  • Headquarters address:
    100 Pine St., Suite 2600
    San Francisco, CA 94111

About Jordan Park Group LLC

Jordan Park Group was founded in 2017 by Frank Ghali, who principally owns the firm through the Jordan Park Holding Company LLC and serves as the firm’s CEO and president. The firm is headquartered in San Francisco and has another office in New York City.

Jordan Park Group provides investment management and financial advisory, family office and impact investing and advising services to high net worth individuals and families, as well as trusts and estates, charitable organizations and businesses. The firm generally advises clients with investable assets exceeding $50 million, although it will accept clients with fewer assets in some circumstances.

Jordan Park Group LLC investing strategy

Jordan Park Group works with each client to understand their overall investment goals and limitations, then builds portfolios with an eye toward achieving optimal returns while managing risk. Investment strategies the firm uses may include diversified portfolios made up of separate accounts sub-advised by third-party advisors; direct investment in ETFs, mutual funds and other investments; and/or direct investment in access vehicles that Jordan Park sponsors. These access vehicles are privately offered pooled investment vehicles, organized into distinct strategies or asset class “sleeves.” The firm also uses alternative assets, at times that those assets could reasonably be expected to boost risk-adjusted returns.

In addition, the firm offers impact investing and advising, helping clients align their investment choices with their values through various socially responsible investing (SRI) and environmental, social and governance investing (ESG) options.

Jordan Park Group LLC disciplinary disclosures

Jordan Park Group discloses no disciplinary events on its Form ADV paperwork, which all registered investment advisors must file with the SEC. For reference, disciplinary disclosures include criminal or civil actions in court and administrative proceedings before a regulatory agency. To view the firm’s Form ADV and learn more, visit its IAPD page.

10. Baker Street Advisors, LLC

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  • Minimum assets required: $5 million
  • AUM: $10,200,000,000
  • Individual investor to advisor ratio: 31:1
  • Fee structure:
    • A percentage of AUM
    • Hourly charges
    • Fixed fees
  • Firm phone number: (415) 344-6180
  • Headquarters address:
    575 Market St., Suite 600
    San Francisco, CA 94105

About Baker Street Advisors, LLC

Baker Street Advisors was founded in 2003. In 2015, the publicly traded asset management company Affiliated Managers Group acquired equity interest in the firm; the remaining equity interests are held by its partners. The firm’s only office is in San Francisco.

Baker Street Advisors provides investment supervisory services and financial planning. It primarily serves high net worth individuals (defined by the SEC as those with at least $750,000 under management or a net worth of at least $1.5 million), as well as associated trusts, estates and pension and profit-sharing plans. The firm requires a minimum account value of $5 million, and all of its individual clients are high net worth individuals.

Baker Street Advisors, LLC investing strategy

Baker Street Advisors builds diversified portfolios intended to minimize risk and maximize after-tax returns, based on clients’ long-term and short-term financial needs and goals, risk tolerance and tax status. The firm pursues index-oriented equity strategies to keep down fees and tax costs, and it may include alternative asset classes — such as commodities and real estate — in an effort to improve risk-adjusted returns.

Before including an investment manager and fund in any recommendations, Baker Street Advisors considers the manager’s reputation, management strength, performance record, philosophy, continuity of management, service to clients, minimum dollar investment requirement and fees. In general, the firm encourages investors to ride out short-term volatility with an eye toward long-term growth.

Baker Street Advisors, LLC disciplinary disclosures

Baker Street Advisors has not been involved in any legal or disciplinary events in the past 10 years. Disciplinary events include criminal or civil actions in court and administrative proceedings before a regulatory agency that involve the firm, its employees or its affiliates. For more information, visit the firm’s IAPD page.

Financial advisors in California: FAQs

California’s income tax rate is high, ranging up to 13.3% for single taxpayers who earn $1 million or more. And while there’s no state estate tax or inheritance tax in California, residents should note that they are still subject to federal estate tax and inheritance laws.

Beyond a bachelor’s degree, there generally aren’t any specific requirements for financial advisors; however, there are licensing requirements depending on what products an advisor sells, such as the Series 6 license that allows an advisor to sell mutual funds and variable annuities, among other products. This is why experts recommend finding a financial professional with an industry certification to indicate that they have training and experience in the field. Certified financial planners (CFPs), for instance, are required to complete an educational program and pass an exam to earn the certification, and they also must abide by certain ethical standards.

No, not all financial advisor firms specialize in retirement planning. If you are looking for assistance in this area, make sure to ask the advisor if they can provide this service and if they have experience doing so.

Additionally, there are some certifications that advisors can earn that indicate a focus on retirement planning, including the chartered retirement planning counselor (CRPC), chartered retirement plans specialist (CRPS) and retirement income certified professional (RICP) designations. Make sure you check any “senior” or “retirement”-related designations on FINRA’s website, however, as not all designations require rigorous training or convey meaningful expertise.

As with all financial advisors, the amount you’ll pay for a financial advisor in California will depend on multiple factors, such as the services rendered, the size of your account and the rates and types of fees the advisor charges.

Some advisors charge a flat or hourly fee for certain services, while others charge clients based on a percentage of assets under management. The most common fee type charged for ongoing investment advisory services is a percentage of assets under management, with the average rate running 1.17% of assets annually, according to a 2019 study by RIA in a Box.

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