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Review of Valic Financial Advisors

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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Valic Financial Advisors, Inc. (VFA) is a large, national retirement plan provider headquartered in Houston that also does business under the name AIG Retirement Services. The company has over $21 billion in assets under management (AUM) and more than 2,100 employees.

The firm provides both investment advisory and broker-dealer services. It serves clients in employee-sponsored retirement plans as well as individual clients (including high net worth individuals), offering several investment plans from which to choose.

All information included in this profile is accurate as of April 1, 2021. For more information, please consult Valic Financial Advisors’ website.

Assets under management: $21,116,994,032
Minimum investment: Varies by program, some with no minimum
Fee structure: A percentage of AUM; fixed fees
Headquarters: 2929 Allen Parkway, L7-20
Houston, TX 77019
https://www.aigrs.com/
866-544-4968

Overview of Valic Financial Advisors

Valic Financial Advisors, also known as AIG Retirement Services, was founded in 1996. Its name, Valic, is an acronym of the Variable Annuity Life Insurance Company, which is the company that owns it. Both the firm and the company that owns it are members of American International Group, Inc. (AIG), a large finance and insurance corporation.

VFA currently has over 1,300 employees who serve in investment advisory roles. Its team also includes licensed agents of an insurance company or agency and representatives of broker-dealers. In addition to Valic Financial Advisors’ headquarters in Houston, the firm has 185 other offices across the country. It is registered across all 50 states as well as the District of Columbia.

What types of clients does Valic Financial Advisors serve?

Valic Financial Advisors primarily provides its services to individual investors. This includes high net worth individuals, who the SEC defines as those with at least $750,000 under management or a net worth of at least $1.5 million, and those in employer-sponsored retirement plans. In some cases, the firm may also work with trusts, charitable organizations and businesses.

Valic Financial Advisors offers four primary programs, each of which has a different minimum account balance requirement. The programs offered are as follows:

  • Managed Investment Program (MIP): Available to individuals, trusts, corporations and other business entities. The minimum initial account balance required ranges from $5,000 to $250,000, depending on the portfolio.
  • Guided Portfolio Services (GPS) Program: Available to individual participants in a retirement plan account with VALIC or VALIC Retirement Services Company (VRSCO), both of which are affiliates of the firm. No minimum account balance is required.
  • Guided Portfolio Advantage (GPA) Program: Available to individuals, trusts, corporations and other business entities. No minimum account balance is required, but you must purchase a PD Freedom Advisor contract, which has a minimum initial premium payment of $25,000.
  • Financial planning: The firm’s financial planning services are limited to individuals. There is no minimum balance requirement for a mutual fund brokerage account, though one may be required for some securities, including annuities and mutual funds issued by the firm’s affiliates as well as unaffiliated mutual funds.

Services offered by Valic Financial Advisors

Valic Financial Advisors provides services for participants of retirement plans and health reimbursement arrangements, including enrollment, education, plan-related services and customer service. The firm also provides brokerage services, such as recommending mutual funds, variable annuity and life insurance products, as well as investment advisory services to retirement plan participants and others. Additionally, VFA provides certain retirement or financial planning services to clients or prospective clients as a one-time investment advisory service.

More specifically, the firm’s services include the following:

  • Investment advisory services
  • Financial planning
    • Retirement planning
    • Charitable planning
    • Education planning
    • Tax analysis
    • Cash flow forecasting
    • Spending analysis and budgeting
    • Debt management
    • Determination of pension and distribution options
  • Insurance/risk management
  • Employee benefit plan services and 401(k) consulting
  • Webinars, educational materials and tools
  • Brokerage services

How Valic Financial Advisors invests your money

Valic Financial Advisors offers three managed account advisory programs to its clients, each of which takes a different approach to investing. Which program a client uses will depend on whether they are a retirement plan participant or have purchased an annuity contract through VALIC, or if they are simply interested in having Valic Financial Advisors manage their investments.

Guided Portfolio Services (GPS) Program: This is a plan offered to those who are participating in employer-sponsored retirement plans provided by VALIC or VALIC Retirement Services Company. It includes both an online, automated service that provides non-discretionary investment advice (GPS Portfolio Advisor), as well as a program that provides discretionary investment advice, meaning advisors can make the final decisions about whether to buy or sell investments (GPS Portfolio Manager).

Guided Portfolio Advantage (GPA) Program: This asset management program is available to clients who purchased fixed and variable annuity contracts, whether through the VALIC Portfolio Director Advantage fixed and variable annuity contract (PD Advantage), which is no longer available, or the VALIC Portfolio Director Freedom Advisor fixed and variable annuity contracts (PD Freedom Advisor).

Managed Investment Program (MIP): This is Valic Financial Advisors’ asset management program, which is based on 19 portfolio models that are designed and managed by various investment managers from five companies: BlackRock Investment Management, Envestnet Portfolio Solutions, Inc., Russell Investment Management, LLC, CLS Investments, LLC, and the Vanguard Group.

Portfolios are selected for clients based on a profile questionnaire that evaluates their risk tolerance, goals, objectives and time horizon. Portfolios are also categorized based on how aggressive they are, ranging from one focused on low-cost investing using passively managed index mutual funds to one that invests in mutual funds, ETFs and separately managed accounts.

Fees Valic Financial Services charges for its services

The fees that Valic Financial Advisors charges vary by program and by portfolio type. The firm typically charges clients based on a percentage of assets under management. Rates are tiered for each program, with rates decreasing the higher the account balance. For example, under the Integrated Managed Investor Account Portfolios in the MIP Program, rates start at 1.83% for the first $250,000 and drop to 0.82% for assets over $5 million.

Depending on the program in which they are enrolled, clients may also owe additional investment-related costs. This may include costs such as fund fees or separate account charges, among other expenses.

Valic Financial Advisors highlights

  • Large number of portfolio options: Valic Financial Advisors’ MIP program offers 19 model portfolios with various investment philosophies to meet a variety of needs.
  • Low minimum account balances: While some portfolios offered by VFA require a minimum account balance of $100,000 or more, some only require $5,000, which makes the firm in reach for a wide range of investors.
  • National presence: With offices across the country, VFA’s services are widely available. In total, the firm has 186 locations throughout the U.S.
  • Awards for user experience: Valic Financial Advisors’ website has consistently won awards for best participant website. The firm has also received numerous awards for its sales literature and education communications.

Valic Financial Advisors downsides

  • Numerous disciplinary disclosures: VFA has had a number of disciplinary actions related to various allegations. Learn more about the firm’s disciplinary history below.
  • Potential conflicts of interest: Because Valic Financial Advisors is dually registered as broker-dealer, the potential for conflicts for interest may arise. For example, because their advisors receive compensation for various products and services, they may be financially incentivized to make certain recommendations. VFA is also owned by a large insurance company, which means there is potential for bias when advising and referring clients in matters related to insurance.
  • Limited customization: While Valic Financial Advisors has a large selection of portfolios to choose from, it only offers model portfolios. If you’re looking for customized options, you won’t find that here.

Valic Financial Advisors disciplinary disclosures

Valic Financial Services has a number of disciplinary disclosures on its record. As a registered investment advisor, the firm is required by the SEC to disclose any disciplinary incidents, which includes civil, regulatory or criminal actions against the firm, its employees or its affiliates over the last 10 years, that may be material to a client evaluating the firm or the integrity of its management team.

Some of the most significant events listed on the firm’s most recent Form ADV filings are listed below, ordered according to the date on which the matter was settled:

  • Nov. 28, 2016: VFA was censured and fined $1.75 million for alleged rule violations regarding its systems, processes and procedures, including allegedly failing to “have a reasonable system or process/procedures designed to address, analyze or review the conflicts of interest in its compensation program.”
  • June 3, 2019: VFA paid a $10,000 fine after the Securities Enforcement Branch of the Hawaii Department of Commerce and Consumer Affairs alleged that the firm “failed to supervise a registered representative who had submitted a transaction without proper customer authorization.”
  • July 28, 2020: In response to SEC findings that VFA didn’t properly disclose some conflicts of interest and didn’t have proper written compliance policies and procedures in place, the firm consented to a cease-and-desist order and a censure. It was ordered to pay affected investors disgorgement of $13.2 million and prejudgment interest of $2.2 million, as well as a $4.5 million civil monetary penalty. Additionally, VFA agreed to review and correct as necessary all relevant disclosure documents.
  • July 28, 2020: VFA consented to a cease-and-desist order and a censure, and agreed to pay a civil monetary penalty of $20 million in response to SEC Findings that the firm didn’t inform Florida teachers that its parent company, VALIC, paid a for-profit company to refer teachers to its products and services. The firm was also found to have insufficient written compliance policies and procedures in place. As part of the settlement, VFA enacted rate caps for the program management fees for plans offered by Florida K-12 schools.
  • Jan. 8, 2021: VFA was censured and fined $350,000 in response to alleged FINRA rule violations regarding the firm’s failure to have processes and procedures in place to monitor rates of variable annuity exchanges and correct any that were inappropriate.

For more information on these and other disclosures, visit the firm’s IAPD page.

Valic Financial Advisors onboarding process

To enroll in one of AIG’s employer-sponsored retirement plans or to access your account online, you will need to get a code from your employer that you can use to complete the enrollment process. To inquire about other services, representatives can be reached Monday through Friday from 7 a.m. to 8 p.m. Central Time at 1-800-448-2542.

Clients in all programs receive quarterly reports, though those in the GPS Program don’t receive written reports like those in the MIP and GPA programs. Instead, GPS offers online advice and reports to clients.

Is Valic Financial Advisors right for you?

If you’re looking for a large, national firm to help with your retirement needs, Valic Financial Advisors may be worth considering, particularly for those in employee-sponsored plans that work with the firm. The firm’s numerous disciplinary disclosures, however, may raise red flags for some. There is also the potential for conflicts of interest, as VFA acts as a broker-dealer and is owned by an insurance company.

Still, the firm is widely accessible to investors with a wide range of investable asset levels, as well as those in a number of locations, as VFA has numerous offices throughout the country.

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Best Financial Advisors in Kentucky 2021: 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 locally based advisor can be challenging, especially given the number of financial advisors in Kentucky. Finding the right advisor has a lot to do with figuring out the proper fit, especially if you live outside of major cities in the Bluegrass State, like Louisville and Lexington, or the capital, Frankfort. When choosing a financial advisor, you need to understand your financial needs and goals as well as how much you can spend for an advisor’s services.

Comparing firms and data points — a necessary step in finding an advisor who is right for you — can be difficult. That’s why we compiled the most pertinent information here on Kentucky’s advisory companies to help guide your decision. To identify the best advisors in Kentucky, 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 acts as a general metric for the firm’s size, and client-to-advisor ratio, which indicates how much attention you may receive as a client of the firm.

Although our ranking can’t suggest which firm may be best for you, it can help you more easily make that determination for yourself. Read on for our list of the top firms in Kentucky and their highlights:

10 best financial advisors in Kentucky

Methodology and criteria

For our search, we looked at firms across the state of Kentucky. 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 April 6, 2021, but urge you to evaluate these firms on https://adviserinfo.sec.gov/.

1. ARGI Investment Services, LLC

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  • Minimum assets required: $50,000
  • AUM: $3,700,382,256
  • Individual investor to advisor ratio: 47:1
  • Fee structure:
    • A percentage of AUM
    • Fixed fees
    • Other (portfolio signals, fixed subscription fee)
  • Firm phone number: 502-753-0609
  • Headquarters address:
    2201 High Wickham Place
    Louisville, KY 40245

About ARGI Investment Services, LLC

ARGI Investment Services, LLC, was founded in 1995 as part of American Express Financial Advisors, but separated from that company in 2003. ARGI partnered with National Planning Corporation until 2010, when ARGI registered with the SEC as a registered investment advisor. Today, ARGI is owned by ARGI Holdings, Inc, whose owners include CEO Joe Reeves, president Neil Quinlan and an employee stock ownership plan.

ARGI provides a range of financial planning, portfolio management, investment advisory and financial education services. Most of the clients served by the firm are individuals, including high net worth individuals who the SEC defines as those with at least $750,000 under management or a net worth of at least $1.5 million. However, the team also serves some pension and profit- sharing plans and charities.

In addition to the firm’s headquarters in Louisville, it has offices in Kentucky in Bowling Green, Paducah, Bardstown and Elizabethtown. The firm also has locations in Cincinnati, Indianapolis, Atlanta and Grand Rapids, Mich.

ARGI Investment Services, LLC investing strategy

ARGI Investment Services has an investment committee that meets quarterly that is responsible for creating, maintaining and monitoring the firm’s investment portfolios. In general, the team divides its strategies into different model portfolios based on the needs and risk tolerance of clients, with an emphasis on offering flexibility.

Different portfolios offered by the firm focus on different strategies, such as stock options, individual stocks and bonds, dividends or indexes. Various weightings and other factors, including the possibility of unpredictable market events, are considered when constructing portfolios and making adjustments.

ARGI Investment Services, LLC disciplinary disclosures

ARGI Investment Services reports no disciplinary disclosures, meaning that neither the firm nor its employees or affiliates have faced any civil, criminal or regulatory actions within the last 10 years. You can find more information about ARGI Investment Services on its IAPD page.

2. MCF Advisors, LLC

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  • Minimum assets required: None
  • AUM: $2,168,282,120
  • Individual investor to advisor ratio: 189:1
  • Fee structure:
    • A percentage of AUM
    • Hourly charges
    • Fixed fees
  • Firm phone number: 859-392-8600
  • Headquarters address:
    50 E. Rivercenter Blvd.
    Covington, KY 41011

About MCF Advisors, LLC

MCF Advisors, LLC was founded in 2004 by Bob Sathe, the firm’s current chairman, and Dave Harris, who serves as CEO. Both Sathe and Harris had long careers with advisory firms before founding MCF Advisors. The firm is completely employee-owned, with Harris owning the majority share.

Most of the firm’s clients are individuals who are not considered high net worth, though it also serves high net worth individuals as well as some pension and profit-sharing plans, charitable organizations and businesses. These clients can expect to receive services including financial planning, portfolio management, bill payment, tax advisory and preparation, help selecting other advisors and assistance with general financial management.

The firm is headquartered in Covington, Ky. It has a second office in Lexington, Ky.

MCF Advisors, LLC investing strategy

When creating an investment plan or managing client assets, MCF Advisors focuses on individualized, long-term objectives. Based on a client’s objectives as well as their risk tolerance, the firm will recommend either a diversified investment strategy or an asset allocation model portfolio.

When identifying potential investment opportunities, MCF Advisors takes into account factors including sector exposure, yield, economic landscape, volatility and credit quality, with a focus on minimizing risk. Investments commonly used in client portfolios include mutual funds, exchange-traded funds (ETFs) and individual stocks and bonds.

MCF Advisors, LLC disciplinary disclosures

MCF Advisors has no disciplinary actions to disclose. The SEC requires all registered investment advisors to report any such events that may be material to a client’s evaluation of the firm or its management in their Form ADV paperwork. More information about the firm can be found on MCF Advisors’ IAPD page.

3. Keystone Financial Group, LLC

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  • Minimum assets required: $10,000
  • AUM: $1,084,007,770
  • Individual investor to advisor ratio: 146:1
  • Fee structure:
    • A percentage of AUM
    • Hourly charges
    • Fixed fees
  • Firm phone number: 859-317-8316
  • Headquarters address:
    527 Wellington Way, Suite 225
    Lexington, KY 40503

About Keystone Financial Group, LLC

Founded in 2008 and registered with the SEC in 2014, Keystone Financial Group is privately owned by Tobin Ray Jenkins, the firm’s chief compliance officer, and managing members Michael W. Kretz and Timothy Scott Jenkins. In addition to the firm’s headquarters in Lexington, Ky., it has eight other offices in Kentucky, including three additional Lexington locations and offices in Ashland, Leitchfield, Mt. Sterling, Paducah and Somerset.

The majority of Keystone Financial Group’s clients are individuals, including some high net worth individuals, as well as businesses. The firm provides a range of financial planning services, alongside portfolio management and educational workshops. A minimum of $10,000 is generally required to open an account.

Keystone Financial Group, LLC investing strategy

When creating portfolios and making recommendations to its clients, Keystone Financial Group uses charting, technical analysis and fundamental analysis. Charting and technical analysis look at past returns in an attempt to predict future price movements. Fundamental analysis, on the other hand, is more focused on factors that may impact future performance, such as a company’s financial statements and management.

When it comes to its investing approach, the team at Keystone Financial Group will both buy and hold investments for the long term and engage in frequent trading. The firm may also use short sales and margin transactions.

Keystone Financial Group, LLC disciplinary disclosures

Keystone Financial Group has no disciplinary disclosures to report. This means the firm, its employees and its affiliates have not faced any civil, criminal or regulatory actions in the past decade. Find out more by visiting Keystone Financial Group’s IAPD page.

4. Legacy Financial Advisors, Inc.

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  • Minimum assets required: Not specified
  • AUM: $764,642,810
  • Individual investor to advisor ratio: 70:1
  • Fee structure:
    • A percentage of AUM
    • Fixed fees
  • Firm phone number: 859-655-5225
  • Headquarters address:
    117 East Fourth Street
    Covington, KY 41011

About Legacy Financial Advisors, Inc.

Legacy Financial Advisors, Inc. was formed in 2006. Its principal owners are managing principal Michael J. Maisel, and principals Paul A. Sartori and P. Trent Lucas. In addition to the firm’s headquarters in Covington, Ky., it has an office in Lakewood Ranch, Fla.

Most of the firm’s clients are individuals, including those who are high net worth, but Legacy Financial Advisors also serves profit-sharing and pension plans and charities. Clients can turn to the firm for financial planning and portfolio management services, and the firm notes that it specializes in estate planning, insurance and risk management.

Legacy Financial Advisors, Inc. investing strategy

When planning portfolios and making investment recommendations, Legacy Financial Advisors focuses on asset allocation, which it believes is the main driver of returns, and diversification, which it believes is key to managing risk.

Portfolios include sub-strategies that make use of capital preservation, growth equity and tactical strategies in order to reach a client’s goals and adhere to their risk tolerance. Additionally, the team may use alternative investments, including private real estate investment trusts, commodities, funds of funds and managed futures.

Legacy Financial Advisors, Inc. disciplinary disclosures

Legacy Financial Advisors doesn’t have any disciplinary disclosures to report. This means that neither the company nor its employees or affiliates have faced any civil, criminal or regulatory actions within the last 10 years that would materially impact how a client sees the business. Visit Legacy Financial Advisors’ IAPD page for more information.

5. Journey Advisory Group, LLC

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  • Minimum assets required: $100,000
  • AUM: $647,445,977
  • Individual investor to advisor ratio: 47:1
  • Fee structure:
    • A percentage of AUM
    • Hourly charges
    • Fixed fees
  • Firm phone number: 859-888-0355
  • Headquarters address:
    15 West 5th St
    Covington, KY 41011

About Journey Advisory Group, LLC

Journey Advisory Group, LLC was founded 2014 as Dynasty Advisor Group, LLC. The firm changed its name to Journey Advisory Group in 2019. Today, the firm is privately held and is principally owned by co-founders Tyler S. Lang and Stephan Lang, although James W. Owens, a senior financial advisor, and Kathryn C. McNeely, the firm’s director of operations, hold minority interests.

Journey Advisory Group serves individuals, including those who are high net worth, as well as some profit-sharing and pension plans. The firm offers a range of financial planning services, as well as portfolio management, pension consulting and educational seminars. A minimum account size of $100,000 is generally required by the firm.

In addition to the Journey Advisory Group’s headquarters in Covington, Ky., there are offices in Temple, Texas, Gold River, California, and Cincinnati.

Journey Advisory Group, LLC investing strategy

A common investment strategy used by Journey Advisory Group is strategic asset allocation, which focuses less on selecting individual securities and more so on the balance between different types of asset classes in a client’s portfolio. The firm aims to determine the right mix of equities, fixed income and cash for clients based on their objectives and risk tolerance.

When analyzing investments, the team at Journey Advisory Group primarily relies on fundamental analysis, which looks at underlying factors like a company’s management and income statements, and technical analysis, which considers past performance trends and cycles to predict future performance.

Journey Advisory Group, LLC disciplinary disclosures

Journey Advisory Group has no disciplinary information to disclose, meaning that neither the firm nor its employees or affiliates have faced any civil, criminal or regulatory actions in the past 10 years. As a registered investment advisor, the firm is required by the SEC to report this information. Learn more by visiting Journey Advisory Group’s IAPD page.

6. KPP Advisory Services LLC

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  • Minimum assets required: Varies by program
  • AUM: $525,736,765
  • Individual investor to advisor ratio: 91:1
  • Fee structure:
    • A percentage of AUM
    • Hourly charges
    • Fixed fees
  • Firm phone number: 502-394-0400
  • Headquarters address:
    9300 Shelbyville Road, Suite 1310
    Louisville, KY 40222

About KPP Advisory Services, LLC

KPP Advisory Services, LLC, which stands for Kentucky Planning Partners, was founded in 2005. The firm’s principal owners remain its founders, Robert A. Davenport and Ken A. O’Neil. The company operates out of its headquarters in Louisville, Ky.

Most of KPP Advisory Services’ clients are individual investors, some of whom are high net worth. The firm offers financial planning, portfolio management and pension consulting.

KPP Advisory Services, LLC investing strategy

KPP Advisory Services makes decisions regarding the appropriate asset allocation and investment approach for a client based on their goals and objectives, risk tolerance, time horizon and knowledge of investing. On the whole, the firm says that its aim is the preservation and protection of wealth.

KPP Advisory Services generally focuses on asset allocation when investing client funds. It makes use of fundamental analysis when selecting investments, which looks at historical and current data on a company to determine its intrinsic value. When making choices about which funds to invest in, the firm also takes into consideration the experience and track record of the mutual fund or ETF manager.

KPP Advisory Services, LLC disciplinary disclosures

KPP Advisory Services doesn’t have any disciplinary disclosures to report, including any civil, criminal or regulatory actions over the prior decade involving the firm, its employees or its affiliates. More information on KPP Advisory Services can be found on the firm’s IAPD page.

7. Landmark Financial Advisors, LLC

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  • Minimum assets required: None, but $1,500 minimum annual fee
  • AUM: $404,708,000
  • Individual investor to advisor ratio: 102:1
  • Fee structure:
    • A percentage of AUM
    • Hourly charges
    • Other (fees for selection of advisors)
  • Firm phone number: 270-782-9222
  • Headquarters address:
    1131 Fairview Avenue, Suite 203
    Bowling Green, KY 42103

About Landmark Financial Advisors, LLC

Landmark Financial Advisors, LLC was founded in 2001. The company is owned by Commonwealth Bank & Trust Company, Inc., a Kentucky-based bank, and LFA Partners, Inc., which is, in turn, owned by the firm’s managing partner and partner. Landmark Financial Advisors is based in Bowling Green, Ky., and doesn’t have any other offices.

Most of Landmark Financial Advisors’ clients are individual investors who are and are not considered high net worth, but the firm also serves charities and trusts, as well as pension and profit-sharing plans. The firm offers a range of financial planning services, including divorce planning, as well as portfolio management and pension consulting.

Landmark Financial Advisors, LLC investing strategy

Landmark Financial Advisors may either create a customized portfolio for a client based on their risk tolerance and objectives, or it may use one or more of the firm’s model portfolios to invest a client’s assets. It emphasizes taking what it describes as a “consultative approach,” which entails gaining an understanding of a client’s larger financial life.

The firm primarily relies on long-term security purchases (those held for over a year) for its investing strategy. However, Landmark Financial Advisors may also make use of trading, margin transactions and options writing when it believes it is appropriate for the client.

Landmark Financial Advisors, LLC disciplinary disclosures

Landmark Financial Advisors has one disciplinary disclosure related to a customer complaint against one of the advisors while they were employed elsewhere. The complaint alleges that the advisor failed to supervise a broker. The case was dismissed after the employer settled the complaint, and the court indicated that it would have dismissed the advisor from the case regardless.

Further details on the disclosure can be found on the firm’s IAPD page.

8. AlphaMark Advisors, LLC

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  • Minimum assets required: Not specified
  • AUM: $371,090,114
  • Individual investor to advisor ratio: 75:1
  • Fee structure:
    • A percentage of AUM
    • Hourly charges
    • Fixed fees
  • Firm phone number: 859-957-1803
  • Headquarters address:
    810 Wright’s Summit Parkway, Suite 100
    Ft. Wright, KY 41011

About AlphaMark Advisors, LLC

AlphaMark Advisors, LLC was established in 1999. The firm’s principal owner is its president, Michael L. Simon, although other individuals also have a stake. The firm is headquartered in Ft. Wright, Ky., which is its sole office location.

Most of AlphaMark’s clients are individuals who both are and are not considered high net worth per the SEC. Its client base also includes some investment companies, charitable organizations, businesses and pension and profit-sharing plans. AlphaMark focuses mainly on providing financial planning, including on topics such as divorce and college planning, as well as portfolio management to its clients.

AlphaMark Advisors, LLC investing strategy

AlphaMark Advisors uses fixed income, equities and alternative investments to build portfolios for its clients, and it describes the ownership of quality stocks, bonds, mutual funds and ETFs as the basis of its investment strategy. Alphamark primarily uses long-term purchases to achieve its clients’ objectives, although it will sell when warranted.

Based on a client’s objectives, AlphaMark will select an appropriate portfolio strategy. Strategies offered include aggressive growth, growth, balanced and income, as well as strategies based on investing in companies of certain sizes.

AlphaMark Advisors, LLC disciplinary disclosures

There are no disciplinary disclosures reported by AlphaMark Advisors on its Form ADV paperwork filed with the SEC. This means that neither the firm nor its employees or affiliates have faced any civil, criminal or regulatory actions within the last 10 years. More information can be found on AlphaMark Advisors’ IAPD page.

9. The Gleason Group, Inc.

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  • Minimum assets required: Not specified
  • AUM: $359,724,444
  • Individual investor to advisor ratio: 44:1
  • Fee structure:
    • A percentage of AUM
  • Firm phone number: 502-882-7300
  • Headquarters address:
    9418 Norton Commons Blvd. Suite 100
    Prospect, KY 40059

About The Gleason Group, Inc.

The Gleason Group, Inc. was founded in 2015 and is privately owned by Gavin T. Gleason, who is also the president and CEO. The firm’s headquarters and only office location is in Prospect, Kentucky.

While most of the clients that Gleason Group serves are individuals who are not considered high net worth, it does also work with high net worth individuals as well as pension and profit-sharing plans and businesses. The firm offers a variety of wealth management services and financial planning and consulting services, including estate planning, education planning, retirement planning, risk management and more.

The Gleason Group, Inc. investing strategy

The Gleason Group takes a long-term, buy-and-hold approach to investing. It emphasizes diversification and also takes into account taxes and investing costs when making investment recommendations to its clients. The team primarily uses mutual funds, ETFs, index funds and individual stocks and bonds to invest client’s assets based on their goals.

For the most part, The Gleason Group focuses on fundamental analysis when analyzing investment opportunities. In other words, the firm evaluates investments based on factors like company management, income statements, current competitors and position in the market to determine whether an investment is worthwhile.

The Gleason Group, Inc. disciplinary disclosures

The Gleason Group has no disciplinary disclosures to report. This includes any civil, criminal or regulatory events from within the last 10 years that a client may find pertinent when evaluating the firm or the integrity of its management team. More information can be found on The Gleason Group’s IAPD page.

10. Atlas Brown

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  • Minimum assets required: None
  • AUM: $421,811,132
  • Individual investor to advisor ratio: 57:1
  • Fee structure:
    • A percentage of AUM
    • Fixed fees
  • Firm phone number: 502-271-2900
  • Headquarters address:
    333 East Main Street, Suite 400
    Louisville, KY 40202

About Atlas Brown

Atlas Brown was founded in 2004 by a group of investment professionals. It is privately owned. Based in Louisville, Ky., the firm places an emphasis on family wealth management and family office services, such as the preparation of financial plans or evaluations, bill pay and consultations on trusts or business succession plans.

Most of the clients served by Atlas Brown are individuals who do not meet the SEC’s definition of high net worth. However, the firm does also work with some high net worth individuals. Its client base also includes businesses, charitable organizations and pension and profit-sharing plans.

Atlas Brown investing strategy

At Atlas Brown, senior portfolio managers are responsible for analyzing investment opportunities and choosing which investments are suitable for a client based on their needs and goals.

Portfolio managers might employ various investing strategies in an attempt to meet these goals. This includes diversifying across assets class and type and using outside managers. Alongside mutual funds and ETFs, portfolio managers may also incorporate individual stocks and bonds as well as alternative investments when building customized portfolios for its clients.

Atlas Brown disciplinary disclosures

There are no disciplinary disclosures reported by Atlas Brown, meaning the firm, its employees and its affiliates have not faced any regulatory, criminal or civil actions within the last decade. More information can be found by visiting Atlas Brown’s IAPD page.

Financial advisors in Kentucky: FAQ

The cost to work with a financial advisor depends on what services are offered and which advisor you work with. In general, you’re likely to see flat or hourly fees for some services, such as financial planning or consultations, and a percentage of assets under management for portfolio management services, with the typical cost ranging from 0.50% to 1.25% of assets under management. Make sure you carefully look at an advisor’s fee structure to ensure you understand what to expect.

Kentucky has income tax and property tax, as well as a sales tax. The non-partisan think tank Tax Foundation ranks Kentucky 13th for state and local income tax collections per capita.

There is no estate tax in Kentucky. However, the state does have an inheritance tax, making Kentucky one of only six states that levies this tax.

Not all financial advisor firms specialize in retirement planning. However, many of them can offer guidance as you prepare for retirement. If retirement planning is a priority for you, then make sure to find an advisor to work with who is well-versed in this area and can provide the services you need.

Because a financial advisor who is a fiduciary is required to put their clients’ best interests first, it is smart to choose a fiduciary when looking for a financial advisor in Kentucky. Advisors who are not bound by fiduciary duty must simply make recommendations that are suitable for their clients, rather than what’s best, meaning they could prioritize their own bottom line over what is truly right for you.

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Gift Tax Limits: Annual and Lifetime Exclusions

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 give someone else a gift, you could be opening yourself up to possible tax consequences. The federal gift tax requires people to pay taxes on gifts that exceed certain amounts. A gift is considered anything of financial value, whether it’s cash, property, securities and more.

Thanks to annual and lifetime gift tax limits, most people won’t have to worry about these taxes. However, those who plan to transfer substantial wealth to loved ones might someday be subject to paying the gift tax.

What is the gift tax?

The gift tax is a federal tax that applies to transfers of property from one person to another when the giver doesn’t receive full value in return. Usually the person giving the gift pays the gift tax, though under some circumstances, the receiver may opt to pay the tax instead.

Gift tax limits for 2021

Thanks to both annual and lifetime exclusions, most people don’t have to worry about the gift tax. Individuals only have to file a gift tax return if they give more than $15,000 to another recipient per year and more than $11.7 million over their lifetime.

Annual gift tax exclusion

The annual gift tax exclusion in 2021 is $15,000, the same as it’s been since 2018. If you gift $15,000 or more to another person in a single year, you’ll have to file a gift tax return. The good news is that the $15,000 limit applies per individual, meaning you could give significantly more than $15,000 in a year, as long as you don’t give more than $15,000 to just one person.

The law also allows married couples to give more. Each partner can give up to $15,000, meaning as a couple, they can give $30,000 to another person before filing a gift tax return. Unlike your normal tax return, married couples can’t file a joint gift tax return — each spouse must file their own for their share of the gifts.

When you exceed your annual exclusion and file a gift tax return, any amount in excess of your annual exclusion is subtracted from your much-larger lifetime exclusion. It’s still unlikely that you’ll actually pay the gift tax, though. The lifetime exclusion allows people to give millions of dollars over their lifetime before paying gift taxes. However, the current lifetime exclusion is the result of a temporary increase in the 2017 Tax Cut and Jobs Act, and it could be drastically reduced in the future.

Lifetime gift tax exclusion

The lifetime gift tax exclusion in 2021 is $11.7 million, up from $11.58 million in 2020. The lifetime exclusion represents the amount individuals can give in excess of their annual exclusion before they have to pay gift taxes.

Most people will never reach their lifetime exclusion, meaning they won’t have to pay gift taxes. But according to estate planning attorney Eido Walny, it’s still something that should be on everyone’s radar in case of future policy changes, either under the current administration or another down the line, that will affect that current $11.7 million lifetime exemption.

“These may seem like really high numbers that almost no one would ever have to worry about, but these are historically high exemptions,” Walny said via email. “The Biden administration has taken the position that the $11.7 million exemption should be reduced to $3.5 million, for example. Historically speaking, the number was $675,000 in the year 2000.”

It is important to note that if you surpass your lifetime exclusion, you don’t have to pay gift taxes on everything you give. You still get an annual exclusion, meaning you only pay gift taxes on anything above and beyond $15,000 per recipient.

What is considered a gift?

According to the IRS, a gift is considered anything transferred from one person to another without full payment received in return. A taxable gift could include cash, but it could also include anything else of value, such as real estate, stocks, jewelry and more.

It’s important to note that something can be a gift even if some payment is received in return if it’s not the full market value.

“There is also a concept of a part gift/part sale that is often misunderstood,” Walny said. “If I have a home worth $250,000 and sell it to my son for $100, that is not a transfer for full consideration. So what I have done is sold part of my house for $100 and made a gift of $240,000, thus triggering the annual and lifetime gift exemptions into play. This should be avoided unless it is done strategically.”

Gift tax exemptions

There are some notable exceptions to the IRS definition of a gift, including:

  • Gifts to your spouse
  • Gifts to a political organization
  • Gifts to a charitable organization
  • Payments for tuition or medical expenses made on someone else’s behalf

Before you take advantage of these gift tax exemptions, there are a few things to consider. First, the exemption for gifts to your spouse only applies if you’re legally married. It doesn’t apply to those in a domestic partnership, civil union or similar formal relationship.

It’s also important to know that if your spouse isn’t a U.S. citizen, you are limited as to how much you can gift them. For gifts to non-citizen spouses, there’s an annual limit of $159,000 in 2021, up from $157,000 in 2020.

When it comes to gifts to charitable organizations, your gifts are only exempt from gift taxes if the organization meets the IRS definition of a qualified organization. Examples include community chests or trusts, war veterans’ organizations, domestic fraternal societies, churches, civil defense organizations and other nonprofit organizations. You can use the IRS Tax Exempt Organization Search Tool to ensure an organization is considered qualified.

Finally, there are certain restrictions to the exemption for tuition and medical expenses. First, the education exemption only applies to tuition — it doesn’t apply to room and board, textbooks or other costs associated with school. And in both the case of tuition and medical expenses, checks must be made directly to the organization or institution. You can’t simply give the money to a loved one for them to use for that purpose.

Your estate and gift tax

Any gifts you give in excess of your annual exclusion have implications beyond just potentially paying the gift tax. The gift tax and the estate tax are interconnected, meaning when you file a gift tax return and use up part of your lifetime exclusion, you’re increasing the amount of your estate that could be subject to estate taxes.

Here’s an illustration of how it works:

As of 2021, your lifetime exclusion is $11.7 million. Suppose that over the course of your life, you gift $5 million in excess of your $15,000 annual exclusions. As a result, you have $6.7 million of your lifetime exclusion left. When you die, anything in your estate above and beyond $6.7 million will be subject to estate taxes.

Remember that gifts only count against your lifetime exclusion when they exceed $15,000. If you had gifted just as much money over your lifetime, but in annual increments of less than $15,000, you would still have your entire $11.7 million lifetime exclusion left to decrease your chances of paying estate taxes.

How to file a gift tax return

If you exceed your annual exclusion of $15,000, you’ll have to file a gift tax return. This form — IRS Form 709 — is due by April 15 of the following tax year and should be filed with the rest of your annual federal tax return.

When you fill out Form 790, you’ll enter any taxable gifts you made throughout the year. You can also indicate whether you’re splitting the gifts with your spouse, enabling you to give twice as much as a couple as you can as an individual.

Keep in mind that filing the gift tax return doesn’t necessarily mean paying the gift tax. Any gifts you must file on your gift tax return reduce your remaining lifetime exclusion. It’s not until you’ve used up your entire lifetime exclusion that you must pay gift taxes on gifts that exceed $15,000.

If you’ve given gifts that require you to file a gift tax return, you may want to hire a tax professional because the form can be confusing,

What is the gift tax rate?

The gift tax rate you may be required to pay depends on the value of the gifts and ranges from 18% to 40%. To determine how much you could owe, find your taxable gift amount on the chart. Though remember, you’ll only have taxable gifts if you’ve gifted more than $11.7 million above your annual exclusions.

If your taxable gifts are less than $10,000, you’ll owe 18% on your entire taxable gift. If it exceeds $10,000, you’ll owe the amount in Column C for the lower tax brackets, as well as the tax rate in Column D for the highest bracket.

Gift Tax Rates for 2020 and 2021
Column AColumn BColumn CColumn D
Taxable amount overTaxable amount not overTax on amount in Column ARate of tax on excess over amount in Column A
$0$10,000$018%
$10,000$20,000$1,80020%
$20,000$40,000$3,80022%
$40,000$60,000$8,20024%
$60,000$80,000$13,00026%
$80,000$100,000$18,20028%
$100,000$150,000$23,80030%
$150,000$250,000$38,80032%
$250,000$500,000$70,80034%
$500,000$750,000$155,80037%
$750,000$1,000,000$248,30039%
$1,000,000$345,80040%

How to avoid gift tax

Most people will never have to pay the gift tax because of the lifetime exclusion. Even if you fear you might be subject to it someday, there are ways to get around it legally.

“Working with a knowledgeable estate planning attorney can help you minimize your gift and estate tax obligations with strategic planning,” said Monique Lavender Greeberg, an estate planning attorney. “We encourage many of our high net worth clients to use a strategic gifting program. This means they capitalize on the $15,000 annual exclusion gifts and make sure they make these gifts every year to their children, grandchildren and other beneficiaries.”

Ways you can avoid the gift tax include:

  • Gifting $15,000 or less per person: Only gifts above your annual exclusion count against your lifetime exclusion. If you gift less than $15,000 per person, per year, then you won’t have to worry about using up your lifetime exclusion.
  • Splitting gifts with your spouse: Each individual has an annual exclusion of $15,000, and couples can gift up to $30,000 per recipient without triggering the gift tax requirement.
  • Making direct payments to institutions: Rather than writing a check to a loved one to help them cover the cost of college, consider writing the check directly to the institution itself, as it becomes an exempt gift.
  • Giving consistently throughout your lifetime: Remember that the gift tax exclusion and estate tax exclusion are connected. By gifting just enough each year to avoid a gift tax return, you can slowly pass your estate down to your loved ones and avoid estate taxes when you die.
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