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Updated on Wednesday, May 13, 2020
Retirement Wealth Advisors is a fee-only investment management and financial planning firm that’s headquartered in Grand Rapids, Mich., with an additional office in Costa Mesa, Calif., and affiliated advisors around the country. The firm has 223 advisors on staff overseeing more than $2 billion in assets under management (AUM). As its name suggests, Retirement Wealth Advisors primarily serves individuals focused on retirement.
All information included in this profile is accurate as of May 13, 2020. For more information, please consult Retirement Wealth Advisors’ website.
|Assets under management: $2,005,282,927|
|Minimum investment: $25,000|
|Fee structure: A percentage of AUM; hourly charges; fixed fees|
|Headquarters:||89 Ionia Ave. NW, Suite 600
Grand Rapids, Michigan 49503
- Overview of Retirement Wealth Advisors
- What types of clients does Retirement Wealth Advisors serve?
- Services offered by Retirement Wealth Advisors
- How Retirement Wealth Advisors invests your money
- Fees Retirement Wealth Advisors firm charges for its services
- Retirement Wealth Advisors’s highlights
- Retirement Wealth Advisors’s downsides
- Retirement Wealth Advisors disciplinary disclosures
- Retirement Wealth Advisors onboarding process
- Is Retirement Wealth Advisors right for you?
Overview of Retirement Wealth Advisors
Retirement Wealth Advisors was founded in 2005 by Jason Wenk, a former Morgan Stanley employee. Wenk is a serial founder in the investment world, with three companies to his name: Retirement Wealth Advisors, FormulaFolios and his latest endeavor, Altruist.
Retirement Wealth Advisors is principally owned by Jason Wenk, and the firm currently has over $2 billion in assets under management. The firm has 223 employees serving as investment advisor representatives; 200 of those employees are also licensed agents of an insurance company or agency. Retirement Wealth Advisors serves upwards of 18,000 individual clients, among other client types.
What types of clients does Retirement Wealth Advisors serve?
Retirement Wealth Advisors offers its services primarily to individuals, though it also works with pension and profit-sharing plans, trusts, estates, charitable organizations and corporations or business entities. Though the firm predominantly serves individuals who do not have a high net worth, the firm’s client base also includes roughly 450 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 minimum required account balance at Retirement Wealth Advisors is generally $25,000, although the firm does state that at its discretion, it may waive or lower the minimum requirement.
Services offered by Retirement Wealth Advisors
As a firm that primarily serves retired or soon-to-be retired individual investors, the menu of options at Retirement Wealth Advisors caters to that audience. You’ll find portfolio management services and financial planning services, such as strategic tax planning and retirement account assessment and recommendations, as well as annuity stress testing. Retirement Wealth Advisors also offers variable annuity asset allocation; variable annuities are annuities that are tied to market-based securities and fluctuate with the market.
Here’s a comprehensive list of what services the firm offers:
- Investment advisory services (discretionary and non-discretionary)
- Portfolio management for individuals and/or small businesses
- Portfolio management for businesses and institutional clients
- Financial planning services
- Net worth statement
- Cash flow statement
- Review of investment accounts, asset allocation and repositioning recommendations
- Strategic tax planning
- Review and recommendations for retirement accounts
- Review and recommendations of insurance policies
- One or more retirement scenarios
- Estate planning review and recommendations
- Education planning with funding recommendations
- Individual securities hold/sell recommendations
- Mutual fund fee analysis
- Annuity stress test
- 401(k) optimization
- Variable annuity asset allocation
- Educational seminars/workshops
How Retirement Wealth Advisors invests your money
As a client of Retirement Wealth Advisors, your account will be managed by FormulaFolios, with an investment strategy that uses a mechanical approach to quantitative analysis. What that means is that investment decisions are recommended by algorithms most often based on mathematical modeling, statistics, market trends and other data. Think of FormulaFolios as a robo-advisor for your financial advisor, which is how Wenk, who founded and owns the company alongside Retirement Wealth Advisors, described it in an interview.
Your investment objectives, risk tolerance and financial goals will inform how your money is invested among different tactical asset allocation strategies, such as long-term purchases, short-term purchases, trading, short shales, option purchases and writing. For the most part, these strategies include individual equity securities, mutual funds, and/or exchange-traded funds (ETFs).
FormulaFolios uses a software called WealthGuard™, which tracks the performance of your portfolio and helps predetermine the amount of downside you’re willing to tolerate; if you opt in to the software, you’ll receive notification of market downturns.
Fees Retirement Wealth Advisors firm charges for its services
Asset-based fees: As a client of Retirement Wealth Advisors, you’ll negotiate how much you’ll pay with your advisor. Your rate will range between 0.50% to 2.00% of your assets under management. Factors that influence the fee percentage you’re charged include: the amount of assets under management, the range of investments in your portfolio and the complexity of your financial circumstances, to name a few.
|Retirement Wealth Advisors Fee Schedule|
|Account Value||Advisory Fee|
|$25,000 and above||0.50%-2.00%|
Brokerage fees: Clients at Retirement Wealth Advisors will most often receive portfolio management service fees from either TD Ameritrade or FolioFN, the two brokerage firms Retirement Wealth Advisors most often recommends. Clients also have the option to choose an alternative brokerage firm if they wish and will pay the affiliated fees. With the FolioFN portfolio, there is an additional 0.10% wrap fee. All portfolios will have a third-party investment advisor fee of 0.10%; those with multimanager series allocations will incur an additional 0.10% fee.
Annuity asset allocation service fees: For clients who wish to use Retirement Wealth Advisor’s variable annuity asset allocation services, the fee is 1.25% for the VaR allocation series and 1.50% for Retirement Wealth Advisors multi-strategy allocation.
Additional costs: Clients who aren’t in a wrap free program are responsible for brokerage fees and other fees charged by the service provider; these fees are separate from fees charged by the firm as they come from the brokerage firm handling the trades for your portfolio, or from providers or managers of mutual funds, ETFs or other managed products.
A $50 fee is charged for accounts that have balances of less than $100,000; however, the fee can be waived at the discretion of the firm.
Financial planning fees: Financial planning services fees are calculated based on the scope and complexity of services you require. The maximum rate is $5,000. Financial planning services typically require a 50% retainer, which will not exceed $1,200. However, a retainer won’t be collected if the financial plan cannot be rendered within six months. Retirement Wealth Advisors does offer a satisfaction guarantee for its financial plans — if you’re not satisfied, the firm will not bill you for the plan.
Retirement Wealth Advisors’s highlights
- Fee-only model: Advisors at Retirement Wealth Advisors do not earn commissions for selling securities or products to clients, which means they do not have a financial incentive to make certain recommendations. This eliminates potential conflicts of interest associated with fee-based models.
- No performance-based fees: Advisors do not earn fees based on the performance of your account; performance-based fees can lead advisors to make riskier investments in pursuit of earning those fees.
- Tailored for retirees: Clients will find a variety of services that directly support the needs of retired and soon-to-be retired individuals, such as review and recommendations of insurance policies, estate planning and cash flow statements.
- No disclosures: The firm has operated since 2005 and has not had any legal or disciplinary events.
Retirement Wealth Advisors’s downsides
- Fee structure isn’t set: With fees ranging from 0.50% to 2.00% of assets under management, depending on what a client negotiates with their advisor, it’s hard for potential clients to compare costs as they won’t know ahead of time what their rate may be. Many firms publish their tiered-fee structure so that a client will know how much they can expect to pay before engaging with a firm.
- High minimum balance for those with limited funds: You need at least $25,000 to work with Retirement Wealth Advisors. While still considerably lower compared to many financial advisor firms, which may have minimums in the hundreds of thousands, it is still higher than you’ll find at some firms that may set minimums in the low thousands.
- Automated portfolio management: Retirement Wealth Advisors use FormulaFolios for portfolio management, which automates investments in the same way a robo-advisor would, but at the cost of an investment management firm.
- Potential conflict of interest: Advisors at the firm use FormulaFolios, a company founded by Jason Wenk, who is also the founder and primary owner of Retirement Wealth Advisors. FormulaFolios helps investment advisors by providing algorithms and software to automate market research and asset allocation. A client could work directly with FormulaFolios instead of Retirement Wealth Advisors and would receive the same investment advice directly from the company that’s managing their money.
Retirement Wealth Advisors disciplinary disclosures
Retirement Wealth Advisors does not have any disciplinary events to disclose in its Form ADV, paperwork all registered investment advisory firms must file with the SEC. Disciplinary disclosures include any criminal charges, regulatory actions or legal action against the firm and its advisors or affiliates in order to help prospective clients evaluate the company.
Retirement Wealth Advisors onboarding process
The first step in establishing a relationship with Retirement Wealth Advisors is to set up an initial consultation, which you can do by calling the firm or filling out the contact form provided on its website. In this first meeting, the firm will collect personal and financial information, such as your financial objectives, to determine the scope of your potential engagement with the firm.
If you decide to work with Retirement Wealth Advisors, you’ll receive an investment management agreement prior to the start of the relationship that outlines the services you’ll receive as well as the associated fees for the services. Your manager then will construct a portfolio based on your goals and objectives, and provide financial planning services if you choose that additional service.
You’ll have regular contact with your advisor, which can include an annual meeting.
Is Retirement Wealth Advisors right for you?
For those planning for retirement who have at least $25,000 and want to work with a fee-only financial advisor firm, Retirement Wealth Advisors may be a good choice, with its retirement focused offerings. However, because the firm uses software that amounts to robo-investing, a savvy client who doesn’t mind foregoing a relationship with an investment advisor could cut out the middleman and use a robo-investing platform themselves, potentially saving money in fees this way.
Further, because Retirement Wealth Advisors does not publish a tiered-fee schedule, and instead leaves it up for negotiation between client and advisor, those who do not know what the industry standards are for fees may find themselves having to do their own cost comparison.