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Updated on Tuesday, June 9, 2020
Mercer Advisors is a national investment advisory firm, with around 50 offices located across the U.S., including its Denver headquarters. Founded in 1985, the firm now has 250 advisors on staff who oversee more than $15.8 billion in assets under management (AUM). Mercer Advisors primarily serves individual investors (including high net worth individuals), providing a suite of wealth management and financial planning services to more than 10,000 clients.
All information included in this profile is accurate as of June 8, 2020. For more information, please consult Mercer Advisors’ website.
|Assets under management: $15,848,965,584|
|Minimum investment: $500,000|
|Fee structure: A percentage of AUM; fixed fees|
|Headquarters:||1200 17th Street, Suite 500|
Denver, Colorado 80202
- Overview of Mercer Advisors
- What types of clients does Mercer Advisors serve?
- Services offered by Mercer Advisors
- How Mercer Advisors invests your money
- Fees Mercer Advisors firm charges for its services
- Mercer Advisors highlights
- Mercer Advisors downsides
- Mercer Advisors disciplinary disclosures
- Mercer Advisors onboarding process
- Is Mercer Advisors right for you?
Overview of Mercer Advisors
Mercer Advisors was founded in 1985 by Kendrick Mercer, a lawyer whose practice focused on estate planning for professionals and families. When his clients needed more services than the drafting of wills, trusts and estate plans, he opened the doors to Mercer Advisors, a planning-focused, independent registered investment advisory firm.
Mercer Advisors, headquartered in Denver with offices found nationwide, is now a corporation that manages more than $15.8 billion in assets. Since its founding, the firm has made 31 acquisitions of other registered investment advisory firms. Mercer Advisors has 403 employees in total, with approximately 250 who perform investment advisory functions. Advisors at the firm hold certifications including the certified financial planner (CFP), certified financial analyst (CFA) and certified public accountant (CPA) designations.
What types of clients does Mercer Advisors firm serve?
For the most part, Mercer Advisors caters to high net worth individuals, defined by the SEC as someone with at least $750,000 under management or net worth of at least $1.5 million. However, the firm’s minimum is account size — $500,000 — is below the official definition of high net worth, and can be subject to negotiation. This is likely why the firm’s client base currently contains slightly more individuals without a high net worth, as compared to high net worth individuals.
In addition to working with individual investors, the firm also serves pension and profit-sharing plans, corporations or other business entities and charitable and nonprofit organizations and foundations.
Clients who wish to use alternative investment strategies (read: private funds) offered by Mercer Advisors must meet minimum investment requirements determined by the SEC. With private fund investing, the SEC defines three common types of investors: qualified purchasers, qualified clients and accredited investors, with the differences between the three generally relating to the investor’s net worth or how much money they have under management:
- Qualified purchasers will need at least $5 million in assets under management
- Qualified clients will need to have a net worth of at least $2.1 million and at least $1 million in assets under management
- Accredited investors will need to have
- a net worth of at least $1 million, or
- an annual income of at least $200,000 for an individual ($300,000 for married couples)
The type of fund structure (such as one with 100 or fewer investors) will determine the types of investors allowed.
Services offered by Mercer Advisors
Mercer Advisors offers a wide range of services and markets itself as a multidisciplinary registered investment advisor and total wealth management firm. With its roster of CFPs, CPAs, CFAs and attorneys, the company is able to offer portfolio management, financial planning, retirement planning and family office services, like in-house estate planning and tax planning and preparation.
In addition to investment advisory services and financial planning services, the firm hosts a podcast called The Science of Economic Freedom, which aims to help people become “better stewards of their money with the [firm’s] science-based, technical expertise.” Mercer Advisors also provides financial education resources geared toward women, as well as the option for potential female clients to speak with a female advisor.
Below is the full suite of Mercer Advisors services:
- Investment advisory services (discretionary and non-discretionary)
- Tax management
- Behavioral coaching
- Financial planning
- Budgeting and saving plans
- Education plans (529 plans and others)
- Retirement planning
- Trust and estate planning
- Charitable and philanthropic goals and implementation
- Gifting strategies
- Intergenerational wealth education
- End-of-life planning
- Guardianship of underage children
- Asset stewardship
- Insurance review
- Tax planning and preparation
- Corporate trustee service
- Financial education
How Mercer Advisors invests your money
When constructing a portfolio for a client, Mercer Advisors will first establish client investment objectives, risk tolerance, financial goals and other relevant information in order to inform the selection of strategies to use, then customizes an investment portfolio specific to each client. In general, Mercer Advisors uses broad asset class and multi-factor diversification as protection against concentrated risk, along with systematic rebalancing, tax and distribution management and an emphasis on low expense ratios.
The following is a list of different strategies Mercer Advisors may employ to meet client goals:
|Mercer Advisors Investment Strategies|
|Total Return Strategies|
|Capital Appreciation Strategy||Focus: Optimize risk and return. Asset allocation is optimized for a maximum return and will include a broad range of allocations designed to meet your targeted needs; this option can include risk premium investing and alternative investments.|
|Tax-Managed Capital Appreciation Strategy||Focus: Maximize after-tax return. This strategy uses tactical tax-loss harvesting for maximum after-tax return and uses tax-sensitive institutional funds, ETFs and separate account managers.|
|Tax-Managed Separate Accounts||Focus: Maximize tax efficiency. With this option, your portfolio will be highly customized with individual stocks or bonds, along with aggressive tax-loss harvesting and active tax-managed buys and sells.|
|Defensive Portfolio Strategy||Focus: Minimize impact of downside events. Designed to protect against market drops and market volatility, your portfolio will employ an increased use of alternative investments, such as managed futures and master limited partnerships, in tandem with asset class diversification.|
|Tax-Managed Defensive Portfolio Strategy||Focus: Minimize after-tax impact of downside events. This type of portfolio also aims to protect against severe market drops and volatility, but with taxable accounts.|
|Global Income Strategy||Focus: Generate higher levels of income. The diversified sources of income with this portfolio can include dividends, coupon payments, call writing and real estate pass-through income.|
|Tax-Managed Global Income Strategy||Focus: Generate higher levels of tax-efficient income. With this strategy, your money will be invested in tax-managed stocks, municipal bonds, equity call writing, preferred stocks, senior secured floating-rate loans and real estate.|
|Corporate Bond Strategy||Focus: Generate income. The purpose of this strategy is to provide higher after-tax income in tax-advantaged accounts. A ladder design is used to balance risk and return with a combination of short-term, medium-term and high-yield bonds.|
|Municipal Bond Strategy||Focus: Generate tax-efficient income. This strategy also aims to provide higher after-tax income in taxable accounts, but with municipal bonds rather than corporate bonds.|
|Fixed Income Separate Accounts||Focus: Enhance capital preservation. This conservative income approach aims to protect your money and uses a portfolio of individual bonds and other instruments.|
Fees Mercer Advisors charges for its services
Mercer Advisors’ fees for its investment management services are based on a percentage of assets under management. While there is a published fee schedule (see below) that outlines the rate that clients are charged based on their account size, the firm reserves the right to negotiate the investment management fee and may make exceptions to its fee schedule on a case-by-case basis.
|Mercer Advisors Investment Management Fee Schedule|
|Assets under management||Fee|
|$10,000,001 and up||0.50%|
Clients should expect separate and additional fees for third-party sub-advisors to provide investment advisory services, as well as fees for institutional mutual funds, accumulation units, unified managed accounts and separate accounts, among other fees.
While Mercer Advisors states that family office services carry a minimum fee of $6,000, in general, all financial planning, family wealth services, tax planning and tax return preparation services provided by the firm are quoted on an individual basis and costs can vary.
|Mercer Advisors Fee Schedule for Other Service Types|
|Level of Service||Minimum Fee|
|Investment management only||$2,400, or 2.00% of AUM|
|Family office services||$6,000|
Mercer Advisors’ highlights
- Full suite of family office services: The firm offers estate planning as well as in-house tax preparation and planning, alongside typical investment management firm services, positioning itself as a one-stop shop for high net worth individuals and families.
- Competitive fees: With fees below the assessed industry average of 1.17%, according to a 2019 study by RIA in a Box, Mercer Advisors offers clients competitive pricing. In comparison, Mercer Advisors’ rates start at 1.10% for portfolios under $1 million and drop all the way down to 0.50% for portfolios over $10 million.
- Award-winning firm: Mercer Advisors has received recognition from a number of entities. Barron’s ranked it the No. 6 RIA in America in 2019, Private Asset Management Awards named it the Best Private Wealth Manager for Client Service for the third year in a row in 2020 and the Financial Times listed it among the top 300 registered investment advisors in the U.S.
- No disclosures: The firm has operated for around 35 years and does not have any legal or disciplinary actions to report.
Mercer Advisors’ downsides
- High account minimum: With an account minimum of $500,000, the firm excludes clients who do not have the appropriate funds. Still, this isn’t an unusually high account minimum, as compared to many other financial advisor firms in this space.
- Potential conflict of interest: While current employees of Mercer Advisors do not sell insurance to clients, firms that are acquired by Mercer Advisors who have employees with insurance licenses may receive commission-based compensation for selling clients insurance, which can pose a conflict of interest.
Mercer Advisors disciplinary disclosures
Mercer Advisors does not have any disciplinary events to disclose on its form Form ADV, a document that registered investment firms are required to file with the SEC. When a registered investment firm or its employees or affiliates face any civil, criminal or regulatory actions, the SEC requires the firm to disclose that information for potential clients to evaluate.
Mercer Advisors onboarding process
Potential clients can initiate a relationship with Mercer Advisors by setting up an introductory call, either using the firm’s online appointment scheduler, calling the firm directly or filling out the contact form provided on its website.
The next step is to review your personal finances with an advisor. The Mercer Advisors team will discuss your financial goals, values and motivations to craft a customized financial plan. The plan may include a proposed budget, a customized investment and tax strategy and an insurance review, as well as a number of other components, depending on your needs.
After the plan is initiated, clients will receive performance reviews and ongoing support on a regular basis.
Is Mercer Advisors right for you?
Mercer Advisors positions itself as a comprehensive wealth management and financial planning firm for those with at least $500,000 to invest. For clients who meet the minimum investment criteria and wish to work with a firm with a nationwide presence that offers many more services than portfolio management, Mercer Advisors may be a solid choice.
With the firm’s roster of CPAs and other professionals, clients have the option to use in-house tax preparation and planning services, along with financial planning and investment management offerings. Additionally, for clients who enjoy financial education, Mercer Advisors offers several options, including its podcast and blog.
As is the case when making any financial decision, it is important to evaluate your options and compare several advisors to make sure you find the right option for you. Don’t hesitate to ask questions, and make sure to do your research before making a final decision.