Review of McAdam Financial

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Updated on Tuesday, April 21, 2020

McAdam Financial is a registered investment advisor based in Philadelphia, with additional locations in Chicago, Boston and Tyson’s Corner, Va. The firm, which has roughly $600 million in assets under management (AUM), focuses mainly on financial planning and consulting services. It primarily serves individual investors, with high net worth individuals comprising a small portion of its current client base.

All information included in this profile is accurate as of April 21, 2020. For more information, please consult McAdam Financial’s website.

Assets under management: $600,043,647
Minimum investment: No stated minimum
Fee structure: A percentage of AUM, up to 2.50% annually, for investment management; either a fixed fee or a percentage of AUM up to 2% for financial planning or consulting
Headquarters:1880 John F Kennedy Blvd., 16th Floor
Philadelphia, PA 19103
https://mcadamfa.com/
(888) 614-5323

Overview of McAdam Financial

Formed in 2014, McAdam Financial is privately owned by its founder, Michael McAdam, who also serves as CEO of the company. In the past, he worked at American Express Financial Advisors (currently known as Ameriprise Financial) and has been named a 2018 Innovator and Entrepreneur Award Winner by CEO Report.

The firm has about 140 employees, 123 of whom are involved with advisory functions. In 2019, the company was recognized by Advisory HQ as a top financial advisor in Philadelphia, where it is headquartered.

What types of clients does McAdam Financial serve?

Most of the clients served by McAdam Financial are individuals. Nearly 2,700 of its clients are classified as individuals, with just over 100 classified as high net worth individuals. For reference, the SEC defines a high net worth individual as someone with at least $750,000 under management or a net worth of at least $1.5 million.

The firm does serve some other clients, like businesses and profit-sharing plans, but it currently works with fewer than five of each of these client types.

McAdam Financial has no stated minimum that clients must meet in order to begin working with the firm . However, certain unaffiliated independent investment managers that the firm works with may impose their own minimums.

Services offered by McAdam Financial

McAdam Financial offers a variety of financial planning and consulting services aimed at individuals and families. These can be offered as standalone products or in conjunction with wealth or investment management services. The scope of the services will depend on a client’s individual needs and the agreement.

When it comes to investment management, McAdam Financial offers both discretionary and non-discretionary services. Most accounts are managed on a discretionary basis, which means the portfolio manager can make decisions without first consulting the client. However, the firm does offer management on a non-discretionary basis, which means the advisor needs to get the client’s permission before making changes. The firm refers to its selection of available services as “Financially Advanced,” due to their customizable nature.

Here is a full list of services the firm offers:

  • Investment management services
  • Financial planning and consulting services
    • Business planning
    • Cash flow forecasting
    • Trust and estate planning
    • Financial reporting
    • Investment consulting
    • Insurance planning
    • Retirement planning
    • Risk management
    • Charitable giving
    • Distribution planning
    • Tax planning
    • Manager due diligence

How McAdam Financial invests your money

McAdam Financial customizes portfolios according to a client’s needs. In deciding on how to allocate client assets, the firm looks specifically at a client’s risk tolerance, time horizon and goals.

McAdam Financial does use their own proprietary asset allocation models in some cases, but those aren’t disclosed. For the most part, McAdam Financial allocates client assets among exchange-traded funds (ETFs) and mutual funds. Additionally, depending on a client’s investment objectives, it may also use individual debt and equity securities, as well as independent managers, privately placed collective investment vehicles and REITs on a limited basis.

When analyzing portfolios and making investment decisions and suggestions to clients, McAdam Financial uses fundamental analysis. With this method of analysis, an advisor looks at the underlying conditions of a fund or a fund issuer. Some of the factors that are considered as part of fundamental analysis include:

  • The issuer’s management team
  • Fund investment strategies
  • Reputation of the fund or the management firm
  • Past performance
  • How the fund has performed relative to other funds in similar classes

Once an asset allocation is determined and a portfolio is built, the firm reviews the client’s account regularly as needed.

Fees McAdam Financial charges for its services

McAdam Financial charges either a fixed fee or a fee based on a percentage of assets under management for its financial planning and consulting services. While these fees are negotiable, rates for asset-based fees generally range up to 2% of net worth or assets annually. They also charge fixed fees from $500 to $25,000 for certain services. Exact rates are determined based on the types of services used and the complexity of the client’s needs.

The firm charges for its investment management services based on a percentage of assets under management, with fees ranging up to 2.50% annually; this fee is also negotiable. In addition to this asset-based fee, clients may incur other costs, including:

  • Transaction fees
  • Short-term redemption fees
  • Mutual fund fees
  • Brokerage fees and commission fees for certain arrangements
  • Orion administrative fee ($45 per year)

These fees might vary based on the custodian and the assets or securities used. Additionally, the firm may offset investment advisory fees based on the amount paid for financial planning or consulting services.

McAdam Financial’s highlights

  • No minimum: Because this firm has no minimum requirement for assets under management, it has a low barrier to entry. This means that more individuals might be able to access its financial planning and investment management services.
  • Simple approach: With an emphasis on fundamental analysis and asset allocation with ETFs and mutual funds, McAdam offers a simple approach many people can understand.
  • Flexible plans: McAdam offers flexibility in its approach. The negotiable fees for various services, as well as the firm’s wide range of service offerings, make it possible to tailor a plan to your needs.
  • No disciplinary disclosures: The firm has a clean disciplinary record. See more details below.

McAdam Financial’s downsides

  • No set fee schedules: Unlike other firms, which may publish a set fee schedule, you won’t know your rate at McAdam Financial until you engage with the firm. The firm does have set caps on fees, though, and it is open to negotiation on rates. Still, this lack of transparency may make price comparison shopping more difficult.
  • Limited investment choices: For those interested in private equity or alternative investments, you might not be able to readily access these assets through McAdam Financial. While it’s possible to access some vehicles like private equity funds and hedge funds, the firm reserves these recommendations for certain investors and notes managers have “broad discretion” in selecting the investments.
  • Potential conflict of interest: Some of the firm’s advisors might also represent insurance agencies or broker-dealers. As a result, there could be a potential conflict of interest, since advisors might be financially incentivized to steer you toward products from which they receive commissions.

McAdam Financial disciplinary disclosures

McAdam Financial has no disciplinary disclosures to report. Because the firm is registered with the SEC, it is required to report material facts about any legal, civil or regulatory actions against the firm, its employees or its affiliates that would be material to clients. The firm reports no such incidents in its Form ADV, paperwork that registered firms must file with the SEC.

McAdam Financial onboarding process

McAdam Financial offers a complimentary consultation to clients before they sign up. You can schedule this consultation by calling 888-614-5323 or by sending an email to [email protected].

If you decide to use McAdam Financial, you’ll have an initial interview where the firm will get an idea of what you hope to accomplish with your money. Once that’s done, you’ll receive a tailored plan. You’ll get regular notice of any changes regarding your account, and can expect contact with your advisor at least annually to see if changes need to be made.

Is McAdam Financial right for you?

With no investment minimum requirement, McAdam may be an accessible choice, particularly for investors near its four offices in Philadelphia, Boston, Chicago and Tyson’s Corner, Va. The firm offers investment management services, as well as a range of financial planning and consulting services, making this a one-stop shop for both financial planning and money management.

However, prospective clients should note that the firm does earn commissions from selling products, which could pose a potential conflict of interest. As is the case when making any financial decision, it’s important to ask questions and make sure you understand the fees you’re paying to ensure you’re making the best decision for your money.