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Updated on Wednesday, August 18, 2021
Allworth Financial is a financial services firm with offices located primarily in California, though it also has a small number of other offices throughout the country. The firm offers a variety of services, including financial planning, investment management, tax services and estate planning. It mainly works with individual investors, including those who are high net worth.
The bottom line: Allworth Financial is a Sacramento, California-based wealth management firm that also offers comprehensive financial planning services.
- Has a relatively high investment minimum of $500,0000
- Offers multiple model portfolios
- Provides educational resources and a podcast
|Assets under management: $10,118,711,655|
|Minimum investment: $500,000|
|Individual investor to advisor ratio: 146:1|
|Fee structure: A percentage of AUM, hourly charges, fixed fees|
|Headquarters: 8775 Folsom Blvd., Suite 100 Sacramento, CA 95826|
All information included in this profile is accurate as of August 17, 2021. For more information, please consult Allworth Financial’s website.
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Overview of Allworth Financial
Founded in 1993, wealth management and financial planning firm Allworth Financial was previously known as Hanson McClain Advisors, after its co-chief founders and senior partners, Scott T. Hanson and Patrick C. McClain. In 2020, Allworth Financial was purchased by Lightyear Capital. The firm is now officially owned and controlled, through intermediate subsidiaries, by Lightyear and the Ontario Teachers Pension Plan.
Allworth Financial has over 200 employees, nearly 90 of whom perform investment advisory functions. The majority of the firm’s advisors are certified financial planners (CFPs).
A look at the founders of Allworth Financial
Hanson and McClain co-founded Allworth as Hanson McClain Advisors in 1993. Together they also founded Liberty Reverse Mortgage, which was eventually acquired by Fortune 500 Company Genworth Financial. Liberty is now one of the largest reverse mortgage companies in the U.S.
Both are nationally recognized financial figures, and co-host the long-running Money Matters radio show.
Hanson is the author of the books “Personal Decision Points: 7 Steps to Your Ideal Retirement Transition” and “Money Matters: Essential Tips & Tools for Building Financial Peace of Mind.” He has been named to Barron’s list of the Top 100 Independent Wealth Advisors six times and listed as one of the 25 most influential people in the U.S. financial services industry.
McClain was listed as No. 34 in the Barron’s Top Independent Advisor ranking.
Allworth Financial’s pros
- Range of financial planning services: Allworth Financial offers four levels of financial planning services — at four different price points — so clients can select the level that makes sense for their financial situation.
- Industry accolades: The firm has received multiple industry awards, including appearing on Barron’s list of the 50 Best RIA firms, the Financial Times’ list of the Top Registered Investment Advisors and Investment News’ list of the Best Places to work for investment advisors.
- Educational resources: Allworth Financial offers workshops and other educational resources, including a personalized retirement planning platform, as well as a regular podcast.
Allworth Financial’s cons
- High minimum investment: The firm’s $500,000 investment minimum will lock out many beginning investors. However, as with most firms, the minimum is negotiable.
- Unclear fees: Since the firm does not publish a set fee schedule for investment management, it’s difficult for potential clients to determine how much it would actually cost for investment management services without first meeting with an advisor. In addition, the firm’s maximum fee of 1.85% of assets under management is higher than average industry rates, which range from 0.50% to 1.25% of assets under management.
- Potential conflicts of interest: Since some of the firm’s advisors are also registered security or insurance agents, they may receive commission on products that they recommend to you, including annuities. This can create a potential conflict of interest as advisors may be financially incentivized to recommend certain products.
What types of clients does Allworth Financial serve?
Allworth Financial’s largest client group is individuals who aren’t high net worth, though it also has a few thousand high net worth individuals on its client roster. (For reference, the SEC defines high net worth individuals as those with at least $750,000 in assets under management or a net worth of at least $1.5 million.)
Allworth Financial generally requires a minimum household investment of $500,000 to open an investment account. However, it will occasionally make exceptions for existing clients or those with the potential for larger future investments.
Services offered by Allworth Financial
Investment advisory services: Allworth Financial provides advisory services to clients, mostly on a discretionary basis (meaning the advisor buys and sells investments on behalf of the client without getting authorization for each transaction). It has a particular focus on preparing for retirement. The firm also offers variable sub-account management services, mainly managing variable annuity products.
Financial planning services: The firm also offers several levels of financial planning for interested clients for an additional fee. Comprehensive Planning – Advanced provides the most extensive level of service, which includes coordination with your other advisors, such as lawyers or accountants, to develop a personal financial plan that may address issues such as business succession and financial legacy planning.
The next level, Comprehensive Planning – Financial Independence, focuses on helping clients achieve financial independence by making sure their portfolio can support them through retirement if they stop working. The two more basic levels of financial planning are Comprehensive Planning and Comprehensive Financial Review. Financial planning clients can choose whether they want to use Allworth Financial for asset management services as well.
Weekly newsletter and workshops: Allworth Financial also produces a weekly newsletter and highly attended workshops.
Here is a full list at the firm’s services:
- Investment management (discretionary/non-discretionary)
- Financial planning
- Retirement planning
- Trust and estate planning
- Tax planning and management
- Cash flow forecasting
- Divorce planning
- Insurance/risk management
- Qualified retirement plan consulting services
- Workshops and seminars
- Newsletters and publications
- Collaboration with clients’ lawyers, accountants, etc.
- Tax preparation, planning and bookkeeping
How Allworth Financial invests your money
Allworth Financial has more than 15 model portfolios that it uses for clients. It selects a portfolio for clients based on their financial situation, goals and risk profile. The model portfolios are made up of a variety of low-fee and no-load mutual funds and exchange-traded funds (ETFs), and range from all equity to all fixed income.
Here’s how they break down:
|Allworth Financial Model Portfolios|
|Active Plus||Mutual funds and exchange-traded funds (ETFs), includes active mutual funds and liquid alternatives|
|Active Plus Conservative Income||Focuses on income first and capital preservation second, includes actively managed bond mutual funds, ETFs and liquid alternative strategies|
|Core-Satellite||Blend of mutual funds and ETFs, with a focus on low-cost ETFs; does not have direct exposure to liquid alternative strategies|
|Core-Satellite Plus||Mutual funds and ETFs, focus on low-cost ETFs; does use liquid alternative strategies|
|Dynamic||Blend of mutual funds and ETFs with a focus on low-cost ETFs; the non-core portion of the portfolio may make tactical moves|
|Dynamic Balanced Income||Blend of mutual funds and ETFs meant to generate income and protect against market downturns|
|Dynamic Diversified Income||Mostly equity mutual funds and ETFs meant to generate income|
|Dynamic US||Mutual funds and low-cost ETFs, no international stocks|
|Efficient Market Discipline||Blend of passively managed equity-based mutual funds and actively managed fixed-income mutual funds|
|Efficient Market Discipline Core||Blend of a limited number of actively managed fixed income-based mutual funds and passively managed equity-based mutual funds|
|Efficient Market Discipline Core I||Blend of a limited number of passive mutual funds|
|Efficient Market Discipline ESG||Passively managed equity-based mutual funds use environmental, social and governance factors and actively managed fixed-income-based mutual funds|
|Efficient Market Discipline ESG Core||Blend of a limited number of passively managed equity-based mutual funds that use environmental, social and governance factors, and actively managed fixed-income based mutual funds|
|Efficient Market Discipline Non-U.S.||Blend of passive mutual funds|
|Market Data Discipline||Long/short strategy using ETFs that may use leverage through margin and hold short positions|
|Pure Index||Primarily low-cost, market cap-weighted ETFs|
The firm does not attempt to time the market, but it may adjust cash holdings based on client situations and market behavior. The firm’s in-house investment management team screens thousands of potential investments each year, choosing those that it believes will best create diversification, reduce risk and provide growth potential.
Fees Allworth Financial charges for its services
Allworth Financial charges separate fees for its financial planning and asset management services.
Asset management fees: The fee for asset management management services varies and is negotiated on a case-by-case basis, though it typically does not exceed 1.85% of assets under management. Most of Allworth Financial’s asset management services are offered as part of a wrap fee program, which means that you won’t have to pay additional transaction costs when the firm buys or sells a security on your behalf.
Financial planning fees: For the firm’s four levels of financial planning offered, clients are typically billed on a fixed fee basis. The fees for such services generally fall as follows:
|Allworth Financial, Financial Planning Fee Schedule|
|Service||Fixed fee range|
|Comprehensive Planning – Advanced||$15,000 to $30,000|
|Comprehensive Planning – Financial Independence||$3,850 to $5,000|
|Comprehensive Planning||$3,450 to $5,000|
|Comprehensive Financial Review||$1,500 to $4,000|
One-half of the financial planning fee is due at the time the Client Agreement is signed, and the remainder is due upon completion of services.
Allworth Financial disciplinary disclosures
Allworth Financial does not have any disciplinary disclosures. All registered investment advisors must disclose in their Form ADV filed with the SEC whether they’ve faced any legal, regulatory or civil disciplinary actions within the last decade that would be material to a client’s evaluation of the firm or the management team.
For more information on Allworth Financial, go to its IAPD page.
Allworth Financial onboarding process
There are several ways to get in touch with Allworth Financial and get started:
- Call 866-951-6003
- Schedule an appointment online for a free call or video consultation
- Fill out this form to have an advisor call you
- Reach out directly to your closest office (find it here)
Once you get connected with an advisor, they’ll chat with you about your overall financial picture and put together a “7 Personal Decision Points” report with recommendations for each step toward retirement.
Clients can request monthly, quarterly or on-demand reports, and Allworth suggests having a financial review at least once a year.
Where Allworth Financial is located
Allworth Financial has offices in the following locations:
- Sacramento, California
- Santa Rosa, California
- Folsom, California
- Roseville, California
- Corte Madera, California
- Fairfield, California
- San Jose, California
- Grandville, Michigan
- Addison, Texas
- Kennesaw, Georgia
- Tucson, Arizona
Is Allworth Financial right for you?
Allworth Financial might be a good option for you if you have $500,000 to invest and are looking for a straightforward investment strategy and comprehensive financial planning services. Clients with fewer assets to invest, or those who aren’t located near an Allworth office but want face-to-face financial planning, might find another firm that’s a better fit.
Before you make your decision, be sure to research multiple firms to ensure you find the right advisor for you.
The “Find a Financial Advisor” links contained in this article will direct you to webpages devoted to MagnifyMoney Advisor (“MMA”). After completing a brief questionnaire, you will be matched with certain financial advisers who participate in MMA’s referral program, which may or may not include the investment advisers discussed.