Review of RBC Wealth Management

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Updated on Friday, May 8, 2020

RBC Wealth Management, headquartered in Minneapolis, is one of the largest wealth management firms in the U.S. with more than 1,900 advisors on staff and over $141.7 billion in assets under management (AUM). The company is the investment management arm of the Royal Bank of Canada, a global financial institution that offers commercial and consumer banking. RBC Wealth Management offers a full range of investment strategies for individual clients as well as business owners and corporations.

All information included in this profile is accurate as of May 8, 2020. For more information, please consult RBC Wealth Management’s website.

Assets under management: $141,725,372,921
Minimum investment: Varies by program, ranging from $2,500 to $250,000
Fee structure: A percentage of AUM; fixed fees; commissions
Headquarters location: 60 South Sixth Street
Minneapolis, MN 55402
https://www.rbcwealthmanagement.com/us/en/
1-800-759-4029

Overview of RBC Wealth Management

RBC Wealth Management has operated under its current name since 2008. Before being acquired by Royal Bank of Canada (RBC) in 2001, a bank that was founded in 1864, the firm operated as Dain Rauscher. RBC Wealth Management is a division of RBC Capital Markets, a limited liability corporation that’s a subsidiary of Royal Bank of Canada.

RBC Wealth Management has a total of 7,825 employees, with 5,755 serving as broker-dealers and 1,938 as investment advisors; 2,259 are also licensed insurance agents. The company is a financial advisor network that has advisors located across the U.S.

What types of clients does RBC Wealth Management serve?

RBC Wealth Management is able to cater to a wide range of clients with a variety of needs, including individuals, businesses, employee benefit plans, foundations, endowments, trusts and estates and government entities.

With an account minimum of just $2,500 for its Unified Portfolio offering, the company is more accessible than many comparable firms. However, minimum investment requirements do increase for other service offerings:

  • Consulting Solutions requires a minimum of $100,000, while fixed income accounts requiring consulting solutions generally require $250,000.
  • The Managed Account Program requires a minimum of either $100,000 or the investment managers’ minimum, whichever is greater.
  • If you select Portfolio Focus for your account, the minimum is $50,000.
  • For RBC Advisor, the minimum investment is $25,000.

Services offered by RBC Wealth Management

RBC Wealth Management offers an extensive menu of services for both individual and family investors as well as business owners and corporations. Individuals can choose from a comprehensive list of financial planning services, including personal banking through the company’s banking arm, and a variety of investment options.

Businesses owners have the option to use RBC Wealth Management services for employee retirement plans and employee stock options, among other services.

Here is a full list of services offered by the firm:

  • Financial planning
    • Cash and credit solutions
    • Client risk prevention
    • Trust services
    • Retirement income planning
    • Education funding
    • Gifting and philanthropic solutions
  • Insurance solutions
  • Portfolio management for individuals and/or small businesses
  • Pension and institutional consulting services
  • Educational seminars/workshops
  • Employee retirement plans
  • Endowment funds, foundations, family trusts and various capital/operating funds
  • Corporate and executive services
    • Employee stock options
    • Directed share programs
    • Corporate share repurchases
    • Corporate retirement plans
    • Equity risk management
    • Affiliate trading programs
    • Insurance planning
    • Lending
    • Restricted stock transactions
    • Pre/post-IPO planning

How RBC Wealth Management invests your money

If you invest with RBC Wealth Management, your advisor will recommend styles and strategies for your portfolio based on your risk profile. Your risk profile is determined by your financial situation, investment goals (such as whether you want to fund your retirement or an inheritance, or if you’re interested in protecting capital or generating income) and your risk tolerance, among other factors. Assets the firm typically uses in client portfolios include exchange-traded products (ETPs), mutual funds, alternative investments, bonds and equity securities.

Additionally, your investing experience will be shaped by which investment program you choose to use. The firm sponsors the following customized advisory programs:

  • RBC Unified Portfolio: This program has the lowest minimum investment requirement — $2,500 — and is managed by an overlay manager or third-party manager. Investments used typically include a mix of mutual funds, ETPs and model portfolios.
  • Portfolio Focus: The minimum for this program is $50,000. A financial advisor will work with you to determine your investment objectives and needs. Investments may include eligible equity securities (foreign and domestic), bond wrap-eligible mutual funds and ETPs.
  • Consulting Solutions: With this service, you select an eligible investment manager that participates in the program as well as an investment strategy. You need a minimum of $100,000, or $250,000 for a fixed-income account.
  • Managed Account Program: This program requires a minimum investment of $100,000 or the investment managers’ minimum, whichever is greater. You select an investment manager (unverified by RBC) and RBC Wealth Management does not review or negotiate the advisory agreement between you and that manager. This program allows you to choose your own investment manager while still receiving brokerage and possible other services from RBC Wealth Management.
  • RBC Advisor: Your financial advisor provides non-discretionary advice for investing in eligible securities with this program, which means that you will need to approve each trade made in your account. Investment recommendations may include eligible securities, such as mutual funds. The minimum is $25,000 for this service.

Fees RBC Wealth Management charges for its services

Investment advisory clients of RBC Wealth Management pay a program fee that’s calculated based on a percentage of assets under management. The maximum fee is 2.50% of assets under management if you invest less than $25 million. For portfolios of greater value, the maximum advice fee is negotiable.

RBC Wealth Management Advice Fee Schedule
Account Value Maximum advice fee
Up to $24,999,999 2.50%
$25,000,000 and above Negotiable

While these are the maximum rates you’ll pay, fees vary, and you can negotiate them with your financial advisor when you enroll in an investment program. Your rate is determined based on a number of factors, including the size of your account, the amount of time you have had an account at RBC Wealth Management, the combined value of all of your accounts with RBC Wealth Management, the types of securities and services provided and other relevant criteria.

Fees are payable in advance on a quarterly basis. Keep in mind that the program fee does not include a number of fees and expenses, such as bid-ask spreads, odd-lot differentials, exchange fees, certain taxes, short-term trading charges and various other charges.

For financial planning services, clients will pay a separate fixed fee. The fee starts at a minimum of $1,000 and tops out at $10,000 in most cases, though in certain cases a higher fee may be negotiated.

RBC Wealth Management’s highlights

  • Low minimum investment requirement: With the barrier to entry set at $2,500 for the Unified Portfolio, RBC Wealth Management’s services are available to a broad audience.
  • Large array of services: Because the company is part of a global bank and has a network of thousands of advisors, clients have the opportunity to use RBC as a once-stop shop for investment and wealth management as well as financial planning.
  • A top employer: The company was named one of “America’s Top Large Employers” by Forbes in 2019, and a “Best Place to Work” by the Minneapolis/St. Paul Business Journal in 2019.
  • No performance-based fees: Because the firm does not charge performance-based fees, your advisor will not be incentivized to take investment risks in an effort to hit a certain benchmark to earn an additional fee.

RBC Wealth Management’s downsides

  • Potentially higher than average fees: The firm’s maximum rate for its investment advisory services is 2.50% of assets under management until you reach $25 million. For high net worth investors, RBC Wealth Management’s rate may be higher than an investment firm with a set tiered-fee schedule that decreases as the level of assets under management increases. For instance, the average total industry fee is 1.17%, according to a study that evaluated 1,350 registered investment advice firms in 2019. RBC Wealth Management mentions that fees are negotiable between the investor and advisor, though this means the burden lays on the client to negotiate a reasonable rate.
  • Advisors earn commissions: When a firm allows advisors to earn commissions, you may find yourself being encouraged to buy certain insurance policies or securities that have commissions attached to the sale. This creates a potential conflict of interest as advisors may be financially incentivized to make certain recommendations.
  • Large number of disclosures: The firm has a long list of fines and disciplinary actions that while not uncommon at large firms, may prompt a potential client to consider working with a smaller, boutique firm without any disciplinary actions.

RBC Wealth Management disciplinary disclosures

The SEC requires all registered investment advisory firms to detail their legal and disciplinary events and include them in their Form ADV, public firm brochures filed online with the SEC. These legal and disciplinary events are known as disclosures. Any events that may be material to a client or prospective client’s evaluation of the business or the integrity of the management, including the advisors of the business, are considered disclosures.

Similar to most massive wealth management firms, RBC Capital Management (CM) has a number of disclosures; since RBC Wealth Management is a division of RBC CM, these disclosures, which are mostly violations of various Financial Industry Regulatory Authority (FINRA) regulations, are reported on RBC Wealth Management’s SEC filings.

Most recently, in early 2019, RBC CM was fined $5 million by the U.S. Commodities and Futures Trading Commission (CFTC) for allegedly engaging in at least 385 noncompetitive, fictitious or unlawful trades. The violations related to the fine occurred from roughly 2011 to May 2017. Prior to that, in 2014, RBC CM had an injunction prohibiting wash trading — the name of a misleading activity describing when an investor simultaneously buys and sells the same financial instruments — yet the prohibited behavior continued.

A number of the fines levied by FINRA are for allegations related to the firm’s failure to put in place supervisory systems and procedures designed to ensure compliance with certain laws and regulations, between 2008 and 2016.

The firm does not have any criminal disclosures on its record, solely regulatory action disclosures.

RBC Wealth Management onboarding process

To get started with RBC Wealth Management, you can call 1-800-759-4029 or fill out a contact form with your name, address, email, phone number and state of residence. You have the option to select whether you preferred to be contacted via phone or email.

Another way to solicit RBC Wealth Management’s services is to fill out a brief survey that gathers information including whether you’re a retiree, business owner or professional; what your financial goals are; and what personal finance concerns keep you up at night. After you fill in your information, RBC Wealth Management will summarize available solutions offered by the company, such as insurance and retirement income planning. You’ll be shown a variety of links to articles about investing, wealth planning and the latest information from the Federal Reserve and be prompted to fill in your contact details so that you can be matched with an advisor.

As one of the largest financial advisor firms in the U.S., with affiliate advisors across the country, there isn’t a standard method for onboarding or client interaction. Your interactions with your advisor will depend on how they run their business. Most financial advisors start by gathering details about your current financial state and financial goals and then recommending possible solutions.

In terms of communications, you can expect monthly statements and trade confirmations, as well as quarterly reports listing securities in custody held by the account.

Is RBC Wealth Management right for you?

RBC Wealth Management may be a good choice if you’re an investor who has multiple personal and business needs that align with RBC Wealth Management’s services and RBC’s banking offerings. Since fees are negotiable and can depend on factors like how much total business the client has at RBC Wealth Management, an investor with multiple uses for the company will likely pay less in fees than an individual who is solely interested in one service.

While the company does have a low minimum investment requirement for one of its investment programs, you’ll have to work with your individual advisor to determine how much you’ll pay for their services. The firm’s fee structure isn’t transparent and may rely on which affiliated advisor you choose. As is the case with any financial product, it will be important to ask questions and comparison shop before deciding which financial advisor is right for your financial situation.