Review of Bernstein Private Wealth Management 2021

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Updated on Friday, June 4, 2021

Bernstein Private Wealth Management is the boutique private wealth management arm of AllianceBernstein LP, a prominent global investment firm with $697 billion in assets under management (AUM). The private wealth division serves affluent individuals, families, foundations and others. Its teams of analysts across the world engage in comprehensive proprietary research. The firm generally requires high account minimums.

The bottom line: Bernstein Private Wealth Management is an arm of global investment firm AllianceBernstein, and serves largely deep-pocketed clients using a mix of tailored strategies.

  • Includes a focus on ESG investing
  • Focuses more on investing than holistic financial planning
  • Emphasizes tax-minimizing strategies
Assets under management: Approximately $105 billion
Minimum investment: Typically $1 million
Individual investor to advisor ratio: N/A
Fee structure: A percentage of AUM, fixed fees, performance-based fees
Headquarters: 1345 Avenue of the Americas
New York, NY 10105
Website: https://www.bernstein.com/
Phone:  (212) 969-1000

All information included in this profile is accurate as of May 21, 2021. For more information, please consult Bernstein Private Wealth Management’s website.

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Overview of Bernstein Private Wealth Management

Bernstein Private Wealth Management manages over $100 billion in assets for affluent individuals, families, endowments, foundations and other financial guardians. Today, it’s a unit of AllianceBernstein LP, one of the largest investment firms in the world.

Thus, advisors who work with private wealth clients are actually employees of AllianceBernsteinLP. In total, AB has more than 2,000 workers in investment advisory and research roles. To distinguish itself from other wealth advisors, the Bernstein unit leans on this relationship, and its access to AB research and its bench of approximately 300 in-house research analysts.

AB was created in 2000 through the combination of private investment manager Sanford Bernstein & Co. and Alliance Capital Management Corporation. But it didn’t change its name to AllianceBernstein LP until 2006, and it changed its branding to AB in 2015. In 2018, it announced it was moving its corporate headquarters from New York to Nashville, Tennessee. The private wealth group remains in New York.

Bernstein Private Wealth Management’s pros

  • Proprietary research: As part of the AB family, advisors and portfolio managers can tap the knowledge of their in-house research team of nearly 300 analysts who cover dozens of industries and thousands of companies, and live all over the world. Although many firms offer in-house research, Bernstein believes it’s differentiated in this area. The firm tied for second place on Institutional Investor magazine’s 2018 list of rising star analysts in the U.S. equity space, with 12 of its analysts deemed rising stars.
  • Access to private funds: Certain clients have access to alternative investments, including hedge funds advised by AB, among others. These offerings can help clients further diversify their portfolios, or give them exposure to a certain theme they believe in.
  • Focus on minimizing taxes: Bernstein estimates that by managing client taxes throughout the year — not just at year end — and focusing on after-tax returns, the annual benefit to clients is roughly 0.5% to 1% a year. To lower your bill, the team closely analyzes opportunities to offset gains or losses, AMT liability, chances to use tax loss carryovers and ways to save based on life transitions or tax code changes.

Bernstein Private Wealth Management’s cons

  • Potential conflicts of interest: AB advises many different types of clients paying varying fees, such as mutual funds they sponsor, hedge funds, private equity funds, institutional accounts and high net worth individuals. This mix puts AB in a position to potentially advantage or disadvantage one client over another. For example, a team member may be financially incentivized to share their best ideas with the clients that pay the highest performance fees, or prioritize one client’s trades in front of another. The firm says it has put policies in place to ensure all accounts it manages as a fiduciary are treated fairly and equally.
  • Financial incentives to sell certain products: AllianceBernstein discloses that its advisors may receive larger commissions for certain products or referrals than others, potentially encouraging them to recommend the higher fee service or provider to their clients. This arrangement can pose potential conflicts of interest.
  • High minimum investment: You typically need at least $1 million to establish an account with Bernstein Wealth Management, so investors with more modest portfolios should look elsewhere. What’s more, if your account falls below the $1 million threshold at any time, your rate will jump to an all-inclusive 1.85% on the first $500,000, and 1.50% on the next $499,999. This is on the high end, as MagnifyMoney reported in 2020 that the standard annual fee among investment advisory firms ranges from 0.50% to 1.25% of assets under management.

What types of clients does Bernstein Private Wealth Management serve?

In general, it’s clients with deep pockets that turn to Bernstein. Clients include:

  • High net worth individuals and families
  • Trusts and estates
  • Charitable foundations
  • Partnerships
  • Private and family corporations
  • Other groups considered “private clients”

Individuals who work with the firm may be planning for a certain event, such as selling a company or an IPO, or want guidance on philanthropic giving or passing wealth to future generations.

The minimum investment needed to work with the firm is generally $1 million. Clients with portfolios larger than $25 million are typically considered institutional investors and handled in a different division of AllianceBernstein. To invest in alternative asset strategies, such as hedge funds, clients usually must be willing to commit at least $500,000.

Parent company AB consists of separate retail and institutional investor divisions to serve institutions as well as retail clients with more modest portfolios.

Services offered by Bernstein Private Wealth Management

The firm focuses primarily on investing, with the goal of preserving the necessary amount of capital and growing the rest. Your personal advisor will not manage your money, but rather work with a team of tax, estate and trust attorneys and CPAs to create a custom plan for you. Clients can implement their custom plan using separately managed accounts, mutual funds, hedge funds and other investment vehicles. Most clients sign up for discretionary management, meaning they don’t need to approve each trading decision.

Here is a comprehensive list of services offered by Bernstein Private Wealth Management:

  • Advanced asset allocation and asset location
  • Philanthropic planning services
  • Estate planning
  • Tax planning
  • Private banking
  • Insurance
  • Business consulting
  • Pre-IPO planning
  • Single-stock diversification strategies
  • Employee stock options
  • Planning for the sale of a business
  • Multigenerational wealth transfer
  • Art valuation
  • Consolidated reporting

Families interested in environmental and societal outcomes can choose to invest in standalone ESG-focused portfolio options. Families can also receive education on living with substantial means through family meetings, family philanthropy and the development of investment policy statements.

For most private clients, AB provides the investment management services, while their broker-dealer subsidiary, Bernstein LLC, provides custody services and order execution for equities. Clients appoint AB and Bernstein to perform their respective services.

How Bernstein Private Wealth Management invests your money

Bernstein touts that what makes it unique from other asset managers is its access to the research services from the larger AB. The latter’s roughly 300 research analysts around the world — who often have work experience in the industries they cover — provide portfolio managers with insight on specific companies and industries. Portfolio managers also may conduct their own due diligence.

Given how much they value research, Bernstein recommends actively managed portfolios in most cases. However, the firm will work with both active and passive accounts.

Portfolio managers use strategies such as long- and short-term purchases, trading, short sales, options, arbitrage and more. Some portfolios are long trades only, while others include short sales as well.

To create your customized plan, and decide which strategies to invest in, you’ll discuss with your advisor factors such as your:

  • Goals
  • Liquid and illiquid assets
  • Income needs
  • Taxes
  • Time horizon
  • Risk tolerance

Your team will then create an asset allocation and run various scenarios based on past returns, volatility and valuations that will determine your hypothetical range of future wealth. Your advisor can then determine what percentage of your portfolio should be allocated to preservation versus growth.

Ultimately, your plan may focus on a single investment strategy, such as growth equities or fixed income high-yield investing, or use a blend of many approaches. Investment strategies can include one or many of the following:

  • Fixed income
  • Value equities
  • U.S. and global growth equities
  • Concentrated growth equities
  • Multi asset
  • Asset allocation services such as customized target date funds
  • Passive management including index strategies and ETFs
  • Alternative investments
  • Real estate services, including REITs

Fees Bernstein Private Wealth Management charges for its services

Bernstein Private Wealth Management is transparent with its fee schedule, but actually determining how much you’ll pay may be difficult to assess ahead of time. That’s because your fees depend on how your assets are invested. In addition, portfolios of between $1 million and $5 million will owe a 0.25% administrative and servicing charge on the first $3 million of assets. Portfolios over $5 million will not be charged this fee.

Be aware that if you withdraw funds and your portfolio value falls below $1 million, your fees could spike, reaching an all-inclusive annual 1.85% on the first $500,000, and 1.50% on the next $499,999. Keep in mind that this covers all investment management, servicing, custody, tax management, rebalancing and investment planning changes.

Fees on return-seeking and diversifying assets, such as U.S. strategic equities
First $1 million 1.25%
Next $1 million 1.20%
Next $3 million 1.10%
Next $5 million 1.05%
Next $15 million 0.90%
Next $25 million 0.75%
Thereafter 0.65%
Fees on risk-mitigating assets
Tax-advantaged and taxable bonds 0.55%
Intermediate-duration institutional portfolio 0.45% (minimum $3 million investment)
Total estimated fee* — For accounts with 60% in return-seeking & diversifying assets and 40% in risk-mitigating assets
$500,000 1.85%
$750,000 1.73%
$1 million to $3 million 1.21%
$4 million 1.13%
$5 million 0.93%
*Includes investment management fees and administrative and servicing charge where appropriate

Instead of an asset-based fee schedule, the firm may instead charge a performance-based fee, which is contingent upon portfolio performance. Arrangements can vary depending on the client.

Bernstein Private Wealth Management’s disciplinary disclosures

Parent company AB, the actual employer to the Bernstein wealth team team, discloses that while no actions are pending against the firm currently, in the past it has faced regulatory fines for various issues. This includes allegations of not registering employees with regulators, and allowing an employee to act as an advisor before the employee had a state license.

For context, the SEC requires investment advisors to disclose in their Form ADV any legal or disciplinary event that is material to a client’s evaluation of the advisory business or the integrity of the management personnel. To learn more, visit the firm’s IAPD page.

Bernstein Private Wealth Management’s onboarding process

To set up a meeting with Bernstein, you can go to the contact form, which requests your name and contact information as well as a brief message.

When you initially meet with your financial advisor, come prepared to discuss your:

  • Values
  • Legacy
  • Philanthropic goals

Clients are required to enter into a written investment advisory agreement with Bernstein before formally beginning a relationship. This will detail how your account will be managed, including your investment strategy, any legal and regulatory restrictions and client-specific guidelines and restrictions.

As Bernstein puts it on their website, the team usually goes through the following steps:

  • Start with an idea of your goals
  • Model your priorities based on statistical techniques
  • Project the likelihood you’ll meet your goals under various scenarios
  • Frame a core capital figure to be set aside for preservation

You are free to communicate with your team via email, over the phone or face-to-face. You also have access to your account details anytime through your online account and the mobile app. Comprehensive performance reviews and strategy reports typically happen quarterly, but you may receive monthly portfolio evaluations.

Where Bernstein Private Wealth Management is located

Bernstein Private Wealth Management is headquartered in New York City. AllianceBernstein lists the following additional U.S. office locations on its website:

  • Atlanta
  • Boston
  • Chicago
  • Cleveland
  • Dallas
  • Denver
  • Houston
  • Los Angeles
  • Miami
  • Minneapolis
  • Nashville, Tennessee
  • Philadelphia
  • San Diego
  • San Francisco
  • Seattle
  • Tampa, Florida
  • Washington, D.C.
  • West Palm Beach, Florida

Is Bernstein Private Wealth Management right for you?

AB has been a stalwart in the industry for decades. That doesn’t mean, however, that the private wealth arm Bernstein is the right choice for all customers. With a typical minimum portfolio size of $1 million (with some exceptions), investors just starting out or that otherwise lack seven-figure portfolios will likely need to look elsewhere. You may also want to seek out alternatives if you’re looking for more financial planning rather than investing, as Bernstein traditionally has focused more on investment services.

Always ask your advisor how much in total they earn off your account, including commissions from other parties. Also ask why they are recommending one product over another. Whether you’re considering AllianceBernstein or any other advisor, it’s your job to make sure you understand how that advisor is paid and to suss out why he or she is recommending that particular investment or product. 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.