Advertiser Disclosure

Investing

Best IRA Account Providers 2020

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 has not been previewed, commissioned or otherwise endorsed by any of our network partners.

Individual retirement accounts (IRAs) are investment vehicles designed to help you save for retirement. If you have a company-sponsored retirement plan, like a 401(k), IRAs are an important supplement to further boost retirement savings. If you’re self-employed, IRAs are your main tool for saving up the nest egg you need to retire.

There are a variety of different IRAs available, and which one you choose depends on your unique employment and financial situation. The two main types are Traditional IRAs and Roth IRAs, which differ in the tax treatment of the funds you place in each account. With a Traditional IRA, you pay income taxes on the funds when you make withdrawals, while with a Roth IRA, you pay taxes on your contributions upfront, allowing the money to grow tax-free.

If you’re self-employed or run a small business, you’ll want to look at opening a simplified employee pension (SEP) IRA. SEP IRAs are available to anyone working as a business sole proprietor, earning freelance income or running a business with one or more employees.

Read on as we round up the best IRA account providers for both active and passive investors. For people who want to take an active role in choosing the investments held in their IRAs, we offer a selection of brokerage firms with premium trading resources. For those who would rather fund their IRA and let somebody else handle the investing process, check out our list of best robo-advisor services.

How we chose the best IRA account providers

We regularly review the latest IRA account offerings — we’ve evaluated 39 different offerings in this round — and have selected our top choices. All of the providers on this list may well be worth considering, with those at the top scoring the best in our methodology.

To determine our list of the best brokerage IRA account providers we focused on trading fees, account minimum, the diversity of investment products offered (stocks, bonds, ETFs and mutual funds) and low account fees (yearly fees, transfer fees and inactivity fees)

To determine our list of the best automated IRA account providers, we focused on management fees and account minimums and considered ease of use and customer support. See our methodology article for more details on how we created our rankings.

Best IRA providers for hands-off investors

Many people lack the time and specialized knowledge required to make the best possible investing decisions. This makes choosing a robo-advisor to manage your IRA a good bet. Robo-advisors are automated investing services operated by established brokerages and stand-alone companies. Robo-advisors generally charge annual management fees, usually 0.25-0.50% of your account balance, in addition to other fees to own ETFs and mutual funds. In return, computer algorithms written by financial professionals maximize your earnings to build a nest egg that will carry you through retirement. These are our picks for the best robo-advisors to manage your IRA.

 Annual Management FeeAverage Expense Ratio (moderate risk portfolio)Account Minimum to Start

Wealthfront

0.25%0.09%$500

Charles Schwab Intelligent Portfolios

0.00%0.14%$5,000

Betterment

0.25% (up to $100,000); 0.40% ($100,000.01 or more)0.11%$0

SoFi Automated Investing

0.00%0.08%$1

Wealthfront — Low fees, great tools

Wealthfront Advisers LLCWealthfront’s low annual costs and free financial planning tools are well-suited to IRA investors. Their annual cost is one of the lowest on this list, with a 0.25% management fee and 0.09% average ETF expense ratio. The $500 minimum to open an account is a bit higher than others on this list, but still attainable for many folks looking to build a nest egg. There is little human interaction at Wealthfront, which saves you time and helps the company keep costs low. This can be a drawback for those who would have complicated tax situations or who prefer a bit of personal attention.

Wealthfront Highlights:

  • An annual management fee of 0.25%; average ETF expense ratio of 0.09%
  • Investments are diversified and automatically rebalanced across four to five asset classes using a portfolio of low-cost ETFs tailored to your risk profile
  • IRAs available: Traditional IRAs, Rollover IRAs, Roth IRAs and SEP IRAs. Wealthfront does not offer inherited or beneficiary IRAs

Charles Schwab Intelligent Portfolios — Automated investing from a leading brokerage

The Charles Schwab Corporation Charles Schwab Intelligent Portfolios can be a smart choice for automating your IRA investments, but do not let the 0% management fee mislead you: Instead of charging a fee, Charles Schwab requires that Intelligent Portfolios clients hold 6-30% of deposited funds in cash at a 0.70% APY, which will decrease overall returns in years where the market returns above 0.70%. In addition, Charles Schwab charges a higher expense ratio for owning their ETFs, which averages 0.14% for a moderate portfolio. The minimum deposit requirement of $5,000 to open an account may be a touch high for investors just starting out. Customer service is one of Schwab’s highlights. As a well-established broker, the company has over 350 branch locations where you can get in-person assistance with your IRA investing questions. Plus, 24/7 phone support is available.

Intelligent Portfolios Highlights:

  • No annual management fee, although customers must keep 6% to 30% of portfolios in cash; average expense ratio of 0.14%
  • Investments are diversified across up to 20 different asset classes and auto-rebalanced
  • Starting at Schwab can benefit investors who anticipate opening other account types down the road
  • IRAs available: Traditional IRAs, Rollover IRAs, Roth IRAs, SEP IRAs, inherited IRAs and Custodial IRA

Betterment — Low fees for balances under $100K

Betterment Holdings Inc.Betterment is one of the most prominent names in automated investing. They offer a full suite of robo-advisor features for IRA investors at low cost, with no minimum deposit. Annual management fees for accounts under $100,000 are 0.25% plus an average 0.11% expense ratio. The annual management fee jumps to 0.40% for accounts $100,000 and up. Betterment gives another advantage to accounts with over $100,000 deposited, allowing those clients to actively manage some assets. If active management is your goal, though, you can avoid Betterment’s 0.40% fee by opening a free brokerage account. If you are managing more than $100,000, you may want to consider a different robo-advisor.A feature that sets Betterment apart versus peers is its Tax-Coordinated Portfolio, which attempts to decrease the amount you pay in taxes. It does this by placing assets that will be taxed highly into IRAs, which have big tax breaks, while placing lower-taxed assets in taxable accounts.

Betterment Highlights:

  • No minimum deposit and low fees for balances under $100k
  • Betterment invests your deposits in ETFs diversified across 12 different asset classes with a strategy personalized to your risk profile
  • The tax-coordinated portfolio feature works to lower your tax bill by placing high-tax items in a tax-advantage IRA account
  • IRAs available: Traditional IRAs, Rollover IRAs, Roth IRAs, SEP IRAs, inherited IRAs and inherited Roth IRAs

SoFi Automated Investing — Low costs, great perks

SoFi Securities LLCSoFi Automated Investing is one of the most competitively-price automated IRA providers, featuring no annual management fee and an ultra-low 0.08% average expense ratio. Valuable perks come with opening a SoFi account, including free access to SoFi financial advisors who can help you create a retirement plan, plus free career counseling and discounts on loans. SoFi also offers an attractive 1.60% APY on deposits in their checking/savings product, though customers must open that account separately.Automated Investing’s main downside is that their portfolios are less customizable than peers’ offerings, with only five different risk levels to choose from, as opposed to at least 10 available from others.

SoFi Automated Investing Highlights:

  • No annual management fee, an average expense ratio of 0.08%, and a $1 minimum deposit
  • IRA and Roth IRA portfolios contain less municipal bonds and more corporate bonds to maximize returns for these tax-advantaged accounts
  • Investments are invested in low-cost ETFs diversified across 16 different asset classes and automatically rebalanced monthly
  • IRAs available: Traditional IRAs, Rollover IRAs, Roth IRAs and SEP IRA

Best IRA providers for active investors

If you are confident in your ability to make financial decisions and are willing to put in the time and effort needed to maintain an investment portfolio, a traditional brokerage IRA can be a good option. With the selected IRA providers below, you have complete control over how investments are allocated within the account. The best part: You pay no management fees.

 Fee per tradeCommission-free ETFsNo transaction fee mutual funds

Charles Schwab

$0.005143,457

Fidelity

$0.005033,636

TD Ameritrade

$0.005713,985

E-Trade

$0.002774,222

Charles Schwab — Free fixed-income consultation

The Charles Schwab CorporationBroker Charles Schwab’s multitude of low-fee investment options and customer service offerings make them a top pick for IRA investors. Schwab offers a number of ways to keep fees low with a low $0.00 per trade commission, $0 minimum to open an account and a large selection of commission-free ETFs and no-transaction fee mutual funds.Especially relevant for investors approaching retirement, Schwab offers free consultations with fixed-income specialists. Customer service is a highlight at Schwab with over 350 branch locations if you need in-person help and 24/7 phone support available. High fees for transfers out of your account or for foreign stock trading are gotchas to look out for.

Charles Schwab Highlights:

  • Free consultation with fixed-income specialist, an advantage for investors close to retiring
  • Low trading commissions at $0.00 per trade
  • There is no minimum deposit to open an IRA with Schwab, so it is easy to get started
  • IRA available: Traditional IRAs, Rollover IRAs, Roth IRAs, inherited IRAs and Custodial IRAs.

Fidelity — Strong mutual fund offerings

Fidelity Brokerage Services LLCFidelity is a top pick among investors saving for retirement, and for good reason. Their vast selection of no-fee mutual funds and ETFs help investors hold onto more of their retirement savings. Fidelity’s lineup of mutual funds with 0% expense ratios are especially noteworthy for fee-conscious investors. Low $0.00 per trade commissions will attract investors who likely actively manage trades in retirement accounts.Fidelity also offers several options for hands-off retirement investors, including its robo-advisor, Fidelity Go, a lineup of well-regarded target date mutual funds, and private client services. For folks looking for in-person help, Fidelity offers over 190 branch locations, and can help by phone 24/7 if you would rather stay home. Low fees and a wide offering of investments make Fidelity a compelling option for beginners.

Fidelity Highlights:

  • 500+ commission-free ETFs, 3,600+ no-transaction fee mutual funds and some proprietary Fidelity funds with 0% expense ratios
  • No fees on early IRA withdrawals or transfers in or out of accounts
  • Great educational resources and useful checklists for retirement
  • IRAs available: Traditional IRAs, Rollover IRAs, Roth IRAs, SEP IRAs, inherited IRAs and custodial IRACustodial IRAs.

TD Ameritrade — Broad selection of no-fee funds

TD AmeritradeTD Ameritrade has a strong IRA offering with almost 4,000 no-fee mutual funds and over 500 commission-free ETFs, paired with strong customer support offerings. Investors comfortable managing their own funds will appreciate TD’s selection of analyst reports, charting tools and watch lists. The high $0.00 per trade commission is TD Ameritrade’s main drawback. If you plan on doing heavy stock or options trading inside your IRA, a broker with lower fees may be a better choice. If you’re willing to pay a premium on trades for full-service customer support and a strong assortment of ETFs and mutual funds, TD Ameritrade is a solid choice.

TD Ameritrade Highlights:

  • Large selection of no-transaction-fee mutual funds
  • Special offers available for qualifying TD Bank customers including free trades and account rebates
  • No fees for early withdrawal, over-contributing, or recharacterizing IRA contributions
  • IRAs available: Traditional IRAs,Rollover IRAs, Roth IRAs and SEP IRAs.

E-Trade — Wide assortment of investments, be careful of fees

E-Trade Securities LLCE-Trade offers one of the broadest assortments of no-transaction-fee mutual funds in the industry with over 4,000 no-transaction-fee mutual funds available, making them an excellent home for your IRA. Their robust research tools make it easy to select your investment portfolio and no minimum deposit to open an account makes it easy to get started. Trading fees are higher than some peers at $0.00 per trade, though they do drop to $0.00 per trade when you place more than 30 trades per quarter.Be aware, however, that E-Trade charges $25 for any early distribution, even those that can be taken penalty-free from IRAs and Roth IRAs, such as first-time home purchases, medical expenses or education expenses. They also charge a $25 fee if you accidentally overfund an IRA or if you need to recharacterize an IRA contribution to a Roth IRA contribution or vice versa.

E-Trade Highlights:

  • Deposits of more than $25,000 in a new E*Trade retirement account qualify for cash bonuses and 500 free trades
  • Expansive selection of no-transaction-fee mutual funds, over 4,200 in total
  • Offers proprietary robo-advisor Core Portfolios for hands-off investors
  • IRAs available: Traditional IRAs, Rollover IRAs, Roth IRAs, SEP IRAs, inherited IRAs and Custodial IRAs.

Individual retirement account FAQs

What is a Traditional IRA?

A Traditional IRA is the most basic variety of IRA. With a Traditional IRA, your contributions are tax-deductible in the year you make them and funds in the account grow tax-deferred. You pay regular income tax on distributions made from the account in retirement.

For 2020, you are allowed to contribute $6,000 per year to a Traditional IRA ($7,000 if you’re 50 or older). These contributions are in addition to one made to a 401(k) employment savings plan, however there are limits to how much you may deduct from your taxes depending on how much you make.

Anyone can open a Traditional IRA if they earn taxable income in the year in which they make a contribution. However, the funds you contribute to a Traditional IRA aren’t allowed to grow indefinitely. Holders are subject to or required minimum distributions, which means you’ll need to start taking distributions from the IRA once you reach the age of 72. In addition, you pay a 10% penalty if you withdraw funds before the age of 59 ½.

What is a Roth IRA?

A Roth IRA is the other main variety of IRA. Contributions to a Roth IRA are not tax-deductible in the year you make them, but your money grows tax-free in the account and you pay no taxes on the income when you withdraw the money in retirement.

The contribution maximums are the same as a Traditional IRA: for 2020, you may add $6,000 per year to a Roth IRA ($7,000 if you’re 50 or older). Like a Traditional IRA, these contributions are allowed on top of ones made to a 401(k) employment savings plan, however there are strict rules capping the annual totals you may put into a Roth IRA depending on how much you make.

One big advantage of a Roth IRA that’s different than a Traditional IRA is that you can withdraw money from a Roth IRA at any time without paying penalty. Note that there are rules dictating how much and when you may make early withdrawals from a Roth IRA. Also, Roth IRAs do not have required minimum distributions.

The rules prevent people earning above a certain amount from opening a Roth IRA. However, there is a tax strategy called a “backdoor IRA” that lets you open a Traditional IRA and then convert it to a Roth IRA.

What is a SEP IRA?

A simplified employee pension (SEP) IRA is designed to let the self-employed and small business owners save for retirement. With a SEP IRA, you get a tax deduction on contributions and funds kept in the account grow tax-deferred. SEP IRA withdrawals in retirement are taxed at regular income tax rates.

Maximum annual contribution limits for SEP IRAs are much higher than other IRAs, because the holders of this type of IRA do not have access to 401(k)s. The maximum contribution for 2020 is $57,000. Eligible SEP IRA owners cannot contribute more than 25% of their annual compensation.

For small business owners that have employees, owners must contribute to their employees SEP IRA accounts at the same rate that they contribute to their own SEP IRA account. Small business employees generally can’t contribute to a SEP IRA set up by their employer — although they can make Traditional IRA contributions in some cases.

What is an IRA rollover?

An IRA rollover is an IRA used to house funds that initially accrued in a different retirement account, such as a 401(k). If you change jobs or otherwise find yourself without access to an employer-sponsored retirement plan, a rollover IRA can help keep your assets invested and growing — while keeping you from paying the taxes and penalties you would face if you cashed out the old account.

The easiest way to perform an IRA rollover is to have your existing account custodian transfer the funds directly to the new account or write a check made out to the new trustee in your benefit. You also can do an “indirect rollover,” where you cash out the account and reinvest the funds manually, but there are some important caveats to keep in mind before taking this approach.

As required by the IRS, your retirement account manager must withhold 20% when writing you a distribution check, even if you intend to reinvest it later. Although you have a 60-day window in which you can redeposit the funds without incurring a penalty, you must redeposit the entire amount, which means you’ll need to make up the difference out of your own pocket.

How do I open an IRA account?

You can open an IRA at your bank, at a wealth management firm, at a brokerage or through online robo-advisors. The specific steps required to open an IRA will depend on your chosen account custodian. You’ll be asked verifiable identification information, such as your Social Security number, and you may also be required to meet a certain minimum initial deposit.

Once your account is open and funded, you can begin to research and invest in specific stocks, bonds and other securities and investments. The investments you choose will dictate how the account will generate income from capital gains over time, so it’s important to select and properly allocate your assets as soon as you open your account.

What are the advantages/disadvantages to managing my IRA myself?

Some folks want to handle their investments by themselves. In order to manage your own IRA, you should feel confident in your ability to invest and make decisions with meaningful sums of money — it is your retirement savings after all. With a brokerage IRA, you will have full control over where and how your money is invested, and by doing it yourself you will not pay any management fees.

The downside is that you will have to spend time and energy researching investment decisions and rebalancing your portfolio. You also do not get the advantage of having a professional money manager in your corner. Luckily, a number of brokers will offer free consultations to get you going, and by investing in mutual funds and ETFs, you can leverage the expertise of some of the best money managers in the world.

What are the advantages/disadvantages to automating my IRA?

Many people would prefer to have a professional manage their investments, either because of lack of time or investing expertise. Choosing an IRA managed by a robo-advisor lets a computer algorithm written by investing professionals is a great strategy a hands-off investor.

This comes at a price. Most robo-advisors charge an annual management fee of around 0.25-0.50% of your account balance. Additionally, you lose some of the customization that comes with managing your own investments. Most robo-advisors will assign you one of their predetermined portfolios based on a questionnaire. As a result, you could end up with a portfolio that isn’t as optimal as a custom one or that contains companies that you would rather not own.

One last thing to consider is that many of these robo-advisors are relatively new. If you are young, chances are that the industry and robo-advisors’ offerings will likely change by the time you are retiring.

What investments should my IRA broker offer?

Ensure that the broker you choose has a strong selection of commission-free ETFs and mutual funds along with screening and portfolio-building tools to help you choose the right investments. Most brokers offer a “select list” of mutual funds, which often feature funds created and managed by the same broker. As with all investing decisions, be skeptical and make sure to compare funds from a number of different companies to try and get the best return while paying the lowest fees.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Advertiser Disclosure

Investing

SIMPLE IRA Contribution Limits 2020

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 has not been previewed, commissioned or otherwise endorsed by any of our network partners.

SIMPLE IRAs are tax-advantaged retirement savings accounts that benefit small business owners and the people who work for them. In addition, you can use the SIMPLE IRA to save for retirement if you are self-employed. Like many other retirement savings vehicles, SIMPLE IRAs are subject to annual contribution limits.

SIMPLE IRA contribution limits

The annual SIMPLE IRA contribution limits for employees and employers in 2020 are as follows:

Annual SIMPLE IRA Contribution Limits

Employees under the age of 50

$13,500

Employees 50 years and older

$13,500, plus $3,000 in catch-up contributions

Employer matching contributions

Up to 3% of employee’s salary

Employer non-elective contributions

2% of the employee’s salary

SIMPLE IRA contribution limits 2020 for employees

For 2020, the amount employees may contribute to a SIMPLE IRA plan is capped at $13,500 per year. That’s an increase from 2019’s limit of $13,000, and an even bigger leap from the $12,500 limit imposed from 2015 to 2018.

It’s worth noting that for employees who are also participating in other employer-sponsored retirement plans, such as 401(k) or 403(b) plans, aggregate annual contributions to all plans cannot exceed $19,500 in 2020. For those 50 and older, the overall annual limit for catch-up contributions is $6,500 for 2020, for a total ceiling of $26,000.

SIMPLE IRA contribution limits 2020 for employers

If a small business owner chooses to offer a SIMPLE IRA plan, they are required to make contributions to their employees’ accounts. They may choose to either match their employees’ contributions, up to a certain limit, or make non-elective contributions.

If an employer chooses matching contributions, their match is capped at 3% of an employee’s annual compensation. While an employer can make matching contributions of less than 3%, the match cannot be less than 1% of the employee’s annual compensation — and it cannot be less than 3% for more than two out of five consecutive years.

If an employer chooses non-elective contributions, they are required to put money into their employees’ SIMPLE IRAs regardless of whether the employees themselves make contributions. With non-elective contributions, the employer must make fixed contributions of 2% of their employees’ compensation. For 2020, the maximum amount of an employee’s total compensation that can be considered for calculating a non-elective contribution is capped at $285,000, up from 2019’s cap of $280,000.

What are the contribution deadlines for a SIMPLE IRA?

Employers are required to deposit their employees’ SIMPLE IRA contributions within 30 days after the end of the month in which those contributions were withheld. Employers are required to make their matching or non-elective SIMPLE IRA contributions by their tax return filing deadline, including extensions.

For people who are self-employed, the deadline for depositing SIMPLE IRA contributions for a calendar year is 30 days after the end of year, or Jan. 30.

SIMPLE IRA contribution limits vs. Roth contribution limits

While SIMPLE IRA contributions are capped at an annual limit of $13,500, annual Roth IRA contribution limits are much lower. For 2020, Roth IRA contributions are capped at $6,000, with an additional $1,000 allowed for catch-up contributions for those 50 and older.

Another differentiating factor of Roth IRAs is that they have income phaseout limits. Depending on how much you make, you may be limited to how much you can contribute or whether you can contribute at all. For 2020, single filers cannot contribute to a Roth IRA if they make more than $139,000, and if married and filing jointly, you’re only able to contribute if you earn less than $206,000.

Can you contribute to both a SIMPLE IRA and a Roth IRA?

You can contribute the maximum allowed amounts to both a SIMPLE IRA and a Roth IRA, as their contribution limits are not cumulative. In fact, most financial advisors recommend you max out both your SIMPLE IRA and Roth IRA if you can afford to do so, as they offer different tax benefits.

While SIMPLE IRA contributions are made pre-tax, and therefore lower your taxable income, your Roth IRA contributions are made with after-tax dollars, so qualified distributions are tax-free.

“Advisors talk about diversification all the time, and usually they are talking about stocks and bonds,” said Gregory Kurinec, a certified financial planner with Bentron Financial Group in Downers Grove, Ill. “But investors will want to diversify their accounts into different tax categories as well. By having a combination of pre-tax (SIMPLE IRA), after-tax advantage (Roth IRA) and non-qualified, this will allow the investor to pick and choose which account to take funds from to best impact their tax situation.”

What is a SIMPLE IRA?

A SIMPLE IRA is an effective retirement savings match plan, especially for small business owners. SIMPLE IRAs are available to small businesses with 100 employees or fewer.

SIMPLE IRAs require employers to make contributions on behalf of their employees, either up to 3% of their employee’s compensation as an employer match or a flat 2% of the employee’s compensation.

As with most financial products, when it comes to saving for your golden years, a SIMPLE IRA is just one of the many options available to you. Explore all of the options at your disposal when deciding how to build your nest egg.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Advertiser Disclosure

Investing

Review of Altfest Personal Wealth Management

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone and is not intended to be a source of investment advice. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

Altfest Personal Wealth Management is an investment management firm based in New York City. The firm typically only accepts clients with a minimum investment of $1 million. For these high net worth clients, Altfest Personal Wealth Management provides customized investment portfolios with comprehensive financial planning services. The firm has 16 employees who provide investment advisory services, and currently oversees $1.21 billion in assets under management (AUM).

All information included in this profile is accurate as of February 10th, 2020. For more information, please consult Altfest Personal Wealth Management’s website.

Assets under management: $1,210,000,000
Minimum investment: $1 million (waivable at the firm’s discretion for young professionals)
Fee structure: A percentage of AUM, ranging from 0.50% to 1.40%, depending on account size; hourly fees; fixed fees
Headquarters: 445 Park Avenue
Sixth Floor
New York, NY 10022
www.altfest.com
212-406-0850

Overview of Altfest Personal Wealth Management

Dr. Lewis Altfest launched Altfest Personal Wealth Management in 1983. He is still the majority owner of the firm and acts as CEO. He runs the organization along with his wife, Dr. Karen Altfest, the firm’s executive vice president, and their son, Andrew Altfest, the firm’s president. Both Lewis and Karen hold Ph.Ds; Lewis is an associate professor of finance at Pace University.

Including the Altfests, the firm has 37 total employees, 16 of whom provide investment advisory services. Altfest Personal Wealth Management specializes in creating customized, actively managed investment portfolios for high net worth clients. The firm and the Altfest family have won numerous awards for their performance, and both Lewis and Karen are regular contributors to financial news programs and publications.

What types of clients does Altfest Personal Wealth Management serve?

Altfest Personal Wealth Management primarily works with individual investors. A client usually needs a portfolio of at least $1 million to open an account with the firm — however, Altfest does make exceptions to this account minimum for “young professionals” who they believe will become high net worth clients in the future. The firm’s individual client base is currently split 40/60 between individuals and high net worth individuals, with the SEC defining high net worth individuals as those with at least $750,000 under management or a net worth of at least $1.5 million.

While the firm works with a diverse range of clients, it specializes in advising women, executives and healthcare professionals. In addition to individual investors, Altfest Personal Wealth Management also works with pension plans, profit-sharing plans, trusts, estates, corporations and other business entities.

Services offered by Altfest Personal Wealth Management

Altfest Personal Wealth Management specializes in investment management and financial planning. However, the firm’s investment management services are available to individuals and small businesses only; these services are not offered to investment companies, pooled investment vehicles, large businesses and institutional clients.

Most of the firm’s investment accounts are run on a discretionary basis, meaning that Altfest Personal Wealth Management advisors can make trades on behalf of the client. The firm does have a few nondiscretionary accounts, where the client must approve all trades themselves.

If a client only wants a few investment recommendations, rather than the management of their entire portfolio, the firm can provide this service as well.

Altfest Personal Wealth Management also offers comprehensive financial planning, as many of its advisors hold the certified financial planner (CFP) designation, a professional certification for financial planners. The firm’s financial planning services include the creation of a detailed financial plan outlining the necessary steps to achieve their goals and objectives. The plan can address specific areas, such as college savings, estate planning and debt management.

More specifically, Altfest’s services include:

  • Investment advisory services and portfolio management (mainly discretionary but some non-discretionary)
  • Financial planning
    • Retirement planning
    • Trust and estate planning
    • Charitable planning
    • Education planning
    • Tax planning
    • Cash flow forecasting
    • Budgeting and strategic planning
    • Long-term care planning
    • Debt management
    • Divorce planning
  • Insurance and risk management
  • Workshops and seminars
  • Newsletters and publications

How Altfest Personal Wealth Management invests your money

Altfest Personal Wealth Management builds unique, customized portfolios for each client based on their time horizon, risk tolerance, income level and long-term goals.

As part of this analysis, the firm follows a system called Total Portfolio Management. Rather than only looking at a client’s investment history, the firm also gets to know their entire financial plan, including income, debts, spending requirements and future earnings potential. The firm uses this information to finetune a portfolio comprised of stocks, bonds, mutual funds, ETFs and private funds.

Altfest Personal Wealth Management follows an active investment approach: this means the firm is regularly trading in an attempt to earn above-average portfolio returns.

Fees Altfest Personal Wealth Management charges for its services

For portfolio management services, Altfest Personal Wealth Management charges a fee based on a percentage of assets under management, with the rate ranging from 0.50% to 1.00%, depending on the size of the client’s portfolio. Altfest does not charge trading commissions or performance-based fees.

Portfolio Size Annual Asset-Based Fee
First $3 million* 1.00%
Between $3,000,001 and $6,000,000 0.75%
Over $6,000,000 0.50%
*If a portfolio falls below $2 million in value at the end of the quarter, the firm will assess an additional 0.10% fee on top of the asset-based fee listed above.

For “young professional” clients who don’t meet the firm’s portfolio minimums, Altfest charges the following fee schedule:

  • In the first year, the firm charges an annual fee of either 1.10% of assets under management or $2,500 whichever is greater.
  • After the first year, the firm charges 1.10% of the portfolio value or $1,500 per year whichever is greater.

This rate includes cash flow analysis, investment analysis, investment management and 401(k) recommendations. Clients who want additional financial planning services will be billed at a rate of $250 per hour.

If a client only wants standalone investment recommendations, Altfest Personal Wealth Management charges either an hourly fee ranging from $500 to $800 an hour, or a fixed fee of at least $3,500 for specific investment recommendation requests.

Finally, some of the investments included in Altfest’s portfolio recommendations may carry additional fees. Clients are responsible for covering these costs, though the money won’t go to Altfest Personal Wealth Management.

Altfest Personal Wealth Management’s highlights

  • Wide range of awards: Over the past few years, Altfest Personal Wealth Management has been recognized as a top investment advisor by publications including Barron’s, Forbes, Financial Times and Financial Advisor magazine.
  • Highly educated management team: The heads of the firm, Dr. Lewis Altfest and Dr. Karen Altfest, both hold Ph.Ds; Lewis is also an associate professor of finance at Pace University. In addition, many of the financial advisors at the firm hold the CFP designation.
  • Customized investment approach: Altfest Personal Wealth Management designs a customized portfolio for every client, tailored to their specific needs, and don’t lump people into one-size-fits-all funds as some firms may do.
  • Extensive financial planning in addition investing: Altfest Personal Wealth Management also specializes in financial planning. When the firm creates a portfolio recommendation, it goes over a client’s entire financial situation before designing the portfolio, not just their existing investments.
  • Specialty in advising women, executive and healthcare clients: The firm specializes in advising women, executives and professionals in healthcare. Additionally, Forbes named Dr. Karen Altfest one of the top women advisors in the country in 2017, 2018 and 2019.

Altfest Personal Wealth Management’s downsides

  • Above-average investment fees: Altfest Personal Wealth Management charges an annual 1.00% asset-based fee on the first $3 million in a client’s account (plus an additional 0.10% per quarter if their portfolio value falls below $2 million). In comparison, the median investment management fee charged by firms for accounts over $2 million is 0.75%, according to Kitces.
  • High minimum to open an account: It takes at least $1 million to open an account with Altfest Personal Wealth Management. While the firm does waive the minimum at its discretion for “young professionals,” the typical investor would need to be quite wealthy to make use of the firm’s services.
  • Only has one location in New York City: The only way to visit the Altfest Personal Wealth Management office in person is in New York City, the firm’s only location.

Altfest Personal Wealth Management disciplinary disclosures

Whenever an SEC-registered firm or its employees or affiliates face disciplinary action, including a criminal charge, a regulatory infraction or a civil lawsuit, the firm is required to report that incident in its Form ADV, paperwork filed with the SEC. Altfest Personal Wealth Management reports in its Form ADV that it has faced no such incidents over the past 10 years, indicating a clean disciplinary record.

Altfest Personal Wealth Management onboarding process

To start the onboarding process with Altfest Personal Wealth Management, you can request a free consultation with one of its advisors. You can contact the firm either by phone at 212-406-0850, by email at [email protected] or by filling out a form on the firm’s website. As part of the onboarding form, the firm asks you to share your story, which helps the firm start determining whether you are a good fit based on your income and profession.

If it seems like a good match, the firm’s advisors will then get to work designing your customized investment portfolio based on your goals, risk tolerance and overall financial situation. When you’re ready to launch, the firm’s advisors would then take care of opening your new accounts, transferring over your existing accounts, making the necessary investments and keeping up with the records for your portfolio.

The bottom line: Is Altfest Personal Wealth Management right for you?

If you’re a high net worth individual or a young professional who wants personalized investment recommendations combined with financial planning, Altfest Personal Wealth Management could be a good choice. This may be especially true if you are in one of the firm’s specialty client categories: women, executives and healthcare professionals. Since Altfest Personal Wealth Management only has one location in New York City, however, the firm might be a better choice if you live in the Northeast rather than other parts of the country.

On the other hand, Altfest Personal Wealth Management’s comprehensive services do not come cheap. The firm’s fees are higher than average, and you’d need at least $1 million to open an account (unless Altfest waives the minimum because you’re a young professional). If you want a simpler investment strategy or prefer to manage your portfolio more on your own, you could find less expensive advisors than Altfest Personal Wealth Management.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.