Review of Royal Alliance Associates 2021

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Reviewed By

Updated on Tuesday, September 21, 2021

Royal Alliance Associates, Inc. is a registered investment advisor and broker-deal based out of Jersey City, N.J. Rather than working with clients directly, Royal Alliance Associates provides the investments, technology and operational support for a nationwide network of independent financial advisors who partner with the firm. Currently, nearly 2,000 employees work as advisors for Royal Alliance Associates. Advisors’ offerings depend on their specific practice, though typically include financial planning, investment management and retirement plan consulting.

The bottom line: Royal Alliance Associates is a national financial network supporting independent, local advisors who primarily work with individual investors.

  • Doesn’t work with clients directly but partners with affiliate advisors
  • Provides investments, technology and operational support to advisors
  • Affiliated advisors use these tools while running their own unique practice
Assets under management (AUM): $20,655,365,726
Minimum investment: Varies by program
Individual investor to advisor ratio: 34:1
Fee structure: A percentage of AUM, hourly charges, fixed fees, other (solicitor/referral fees)
Headquarters: 10 Exchange Place, Suite 1410
Jersey City, NJ 07302
Website: www.royalalliance.com
Phone: (800) 821-5100, ext. 5389

All information included in this profile is accurate as of September 9, 2021. For more information, please consult Royal Alliance Associates’ website.

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Overview of Royal Alliance Associates

Royal Alliance opened in 1969 and has been operating for over 50 years. The firm provides investments, technology and operational support to independent financial advisors. Royal Alliance Associates is a subsidiary of Advisor Group, a network of several support firms providing services for thousands of independent financial advisors. The Advisor Group is owned by a combination of investment funds and trusts.

Royal Alliance Associates has over 3,600 employees of which roughly 1,900 work in an advisory capacity. Each advisor associated with the firm is independent and free to design their practice how they want using the resources from Royal Alliance Associates.

Royal Alliance Associates’ pros

  • Combines the resources of a national firm with local attention: Through Royal Alliance Associates, local independent advisors are free to design their practices to best fit the needs of their clients, but they still have access to the investments and technology of a large national network.
  • Broad investment selection: Advisors working with Royal Alliance Associates can utilize multiple investment programs for clients’ portfolios with different strategies, including access to exclusive funds normally reserved for institutional investors.
  • Customized portfolio recommendations: Advisors at Royal Alliance Associates design portfolios based on each client’s unique goals and risk tolerance; they don’t offer one-size-fits-all funds.
  • Low investment minimums: Clients can access some of the Royal Alliance Associates’ programs with no investment minimum. The highest minimum the firm requires is just $100,000. This makes the firm a lot more accessible than other investment advisors who could require $1 million or more.
  • Range of services on top of investment management: Besides investment management, Royal Alliance Associates also offers financial planning, retirement plan consulting and educational seminars. For those who don’t want a full financial plan, you can also request consulting for a specific financial topic like budgeting or debt management.

Royal Alliance Associates’ cons

  • A little tricky to find an affiliated advisor: Royal Alliance Associates does not provide a sign-up page for new clients. There also isn’t a clear list of the firm’s affiliated advisors. To find one, you need to either search on a map on the Royal Alliance Associates’ website or pull up the firm’s SEC filing.
  • Inconsistent advisor process: The downside of advisor flexibility is that each one can have a different process, investment philosophy, range of credentials and client specialties. Clients will need to review each advisor separately since there is no consistent Royal Alliance Associates program.
  • Potential conflicts of interests from advisor compensation: The Royal Alliance Associates brochure notes that advisors can make commissions from selling certain investment and insurance products, creating a potential conflict of interest as advisors may be financially incentivized to make certain recommendations.
  • No public release of investment fees: Royal Alliance Associates does not list fee schedules for its investment management services. It only says that clients will negotiate fees with the advisor upon signing up. This makes it hard to compare investment fees ahead of a meeting.

What types of clients does Royal Alliance Associates serve?

Royal Alliance Associates primarily works with individual investors. They make up nearly all of the firm’s clients as well as most of its assets under management. Royal Alliance Associates’ individual clients are split between those who are high net worth and non-high net worth. The SEC defines a high net worth individual as someone with at least $750,000 invested with the advisor or a total net worth of over $1.5 million.

Royal Alliance Associates offers several types of investment and financial programs, each with different minimum investment requirements. The firm’s financial planning, non-discretionary investment services and consulting services do not have an investment minimum. Others do have an investment minimum but the highest is a comparatively low $50,000 for the firm’s VISION2020 Wealth Management Platform. Also note that any third-party advisors can set their own minimum requirements.

Aside from individuals, Royal Alliance Associates also works with a range of other types of clients including retirement plans, estates, charitable organizations, trusts, corporations, banking organizations and government entities. The Royal Alliance Associates website does not list any type of individual client specialties, as its primary goal is to provide services to advisors, not to clients. The actual advisors in the network could have their own specialties but it will depend on which professional you work with.

Services offered by Royal Alliance Associates

Royal Alliance Associates runs several wealth management platforms, giving its affiliated advisors access to a number of different investment programs. Through this partnership, advisors can provide various wealth and portfolio management services to their clients. The majority of clients work with Royal Alliance Associates in a discretionary management setup, meaning the advisor has the ability to make trades on the client’s behalf. However, you could also sign up for a non-discretionary program, meaning your advisor must get your permission for each trade or you can make the trades yourself.

Besides investment management, the firm offers comprehensive financial planning as well as consulting on specific topics like budgeting, education planning and debt management. The firm also offers retirement plan consulting. For its financial advisor affiliates, Royal Alliance Associates can provide sales support, training and consulting for specialty products, such as insurance.

Since Royal Alliance Associates is also a broker-dealer, it also can process investment trades. Additionally, it offers margin loans, where you borrow to make investments; and cash loans, secured by your investment balance.

  • Investment management
  • Financial planning
  • Consulting services
    • Budget planning
    • Business financial planning
    • Cash flow analysis
    • Philanthropic/charitable planning
    • Debt management
    • Life transition planning
    • Education planning
    • Estate, legacy or multigenerational planning
    • Major purchase planning
    • Special needs planning
    • Major purchase planning
    • Family financial planning
  • Retirement plan consulting
  • Selection of third-party advisors
  • Lending services
  • Educational seminars and workshops
  • Broker-dealer services
  • Sales consulting and support for financial professionals

How Royal Alliance Associates invests your money

Royal Alliance Associates provides the investment tools and platforms for its affiliate advisors, but doesn’t tell them what investment strategy to use. Ultimately, the way your money will be invested depends on which advisor you sign on with.

Royal Alliance Associate’s brochure does state that its advisors will customize their portfolio recommendations, based on a discussion of your goals and risk tolerance (which they determine by giving you a questionnaire). You can also set limits to your strategy, like requesting that certain types of investments are not used in your portfolio.

While Royal Alliance Associates does not mandate any particular investment strategy, the firm does note that its partner advisors commonly use fundamental and technical analysis when evaluating investment opportunities. Fundamental analysis attempts to measure the fair market value of an investment, based on the company fundamentals and the industry, to try to find buying opportunities, while technical analysis looks for market trends and signals to predict future prices.

Royal Alliance Associates does have multiple investment programs, which differ based on the types of investments that could be available for your portfolio:

Royal Alliance Associates Investment Program Options
Program Minimum investment Investment strategy
VISION2020 Wealth Management Platform – Advisor Managed Portfolios $50,000 Advisors use the platform to design custom portfolios of stocks, bonds, options, exchange-traded funds (ETFs), mutual funds and other securities based on a client’s goals and risk tolerance.
VISION2020 Wealth Management Platform – Unified Managed Account Program $5,500 Advisors use the platform to invest your money across pre-designed investment strategies, mutual funds and ETFs according to an asset allocation model.
Third-party advisory services Each third party sets its own minimum Royal Alliance advisors work in a co-advisory agreement with outside third parties. Program details depend on the third party.
Non-discretionary investment services No minimum You pay an advisor for investment and portfolio recommendations, but it’s up to you to make the trades.

Fees Royal Alliance Associates charges for its services

Investment management fees: For its investment management services, Royal Alliance Associates charges a fee based on a percentage of your assets under management. You negotiate the rate with your advisor when you sign up. The fee you pay will cover both their advisory fee as well as the cost of using the Royal Alliance Associates investments. Advisors can also earn a referral/solicitor fee if you sign up for a program based on their recommendation, but you don’t hire them to manage your portfolio. However, this will generally be taken out of the advisory fee you pay, rather than being an additional cost.

Some of the Royal Alliance Associates programs operate on a wrap fee basis, meaning you pay one flat fee that also includes trading costs. Others work on a non-wrap fee basis, so you would also owe for the brokerage transaction charges. On top of the Royal Alliance Associates’ fees, you could also owe for the expenses of the investments themselves, like the internal fees of mutual funds and ETFs or separate charges from working with an outside third-party manager.

Non-discretionary management or standalone financial planning fees: If you sign on for a non-discretionary management program where you make your own trades or if you want standalone financial planning, Royal Alliance Associates could either charge a fixed fee or on an hourly basis. Fixed fees typically range from $500 to $10,000 depending on the scope of the work, while hourly fees run anywhere from $50 to $300 per hour.

Retirement plan consulting fees: For retirement plan consulting, Royal Alliance Associates could charge a fixed fee, an hourly fee or an asset-based fee.

Seminar fees: Seminars offered by the firm can carry a cost of up to $300 per attendee, though some sessions are free.

Royal Alliance Associates disciplinary disclosures

Royal Alliance Associates has four disciplinary disclosures to report, all related to the sale of different investment products. Royal Alliance Associates settled all cases by paying a fine and updating its procedures, but also did not admit wrongdoing in most of the settlements. Here are the firm’s disciplinary disclosures, listed in chronological order:

  • November 2020: The SEC found that Royal Alliance Associates did not have the proper procedures in place to prevent unsuitable investments for clients in complex products, specifically volatility-linked exchange-traded products (ETPs). Without admitting wrongdoing, the firm paid a civil penalty of just over $500,000 and took steps to restrict these investments in client accounts to prevent this violation from happening again.
  • March 2016: Royal Alliance Associates, along with two other firms in the Advisor Group, faced a cease-and-desist order from the SEC due allegations related to how they invested in certain mutual funds for clients. Advisors were found to have recommended mutual fund share classes that had higher expenses, even though a lower cost option was available. The SEC also found this presented a conflict of interest, as advisors earned a financial incentive for recommending the more expensive option, and this was not properly disclosed to clients.The three firms agreed to jointly pay nearly $10 million in client reimbursement, interest and penalties. They also agreed to hire a compliance consultant to help update their procedures and prevent this from happening again.
  • December 2015: Without admitting wrongdoing, Royal Alliance Associates agreed to a $225,000 fine from FINRA due to an alleged failure to provide the proper sales charge discounts for client purchases on unit investment trusts. Royal Alliance Associates also refunded the impacted clients and updated its procedures to correct this issue.
  • June 2015: The State of Nevada found that Royal Alliance Associates did not have the proper supervisory procedures in place for the sale of variable annuity products. Without admitting wrongdoing, the firm paid a $21,000 fine and agreed to report any complaints from clients who purchased annuities during this unsupervised period. The firm also updated its procedures to add more supervision.

For reference, the SEC requires all registered investment advisors to report on their Form ADV filing as well as their firm brochure, any criminal charges, regulatory infractions and civil lawsuits taken against the firm and its representatives or affiliates within the last 10 years. You can view these documents and learn more about Royal Alliance Associates’ disciplinary history by visiting the firm’s IAPD page.

Royal Alliance Associates onboarding process

  1. Find a Royal Alliance Associates affiliated advisor: Royal Alliance Associates does not work with clients directly, as it just provides the investments and operational support. Instead, you need to find one of the firm’s partner advisors to work with. To do so, you can use the map on the firm’s website map to search for local affiliates, or you can find a list of partner firms on the firm’s Form ADV filing. Alternatively, if you find the website of a partner advisor, they may list that they work with Royal Alliance Associates somewhere on their site.
  2. Contact the partner advisor: The advisor’s website should list their contact information and their onboarding process. While each advisor’s process could be a little different, the first step will likely be to schedule an initial meeting.
  3. Have an initial meeting: In this meeting, the advisor will discuss your financial goals and investment preferences. They will also give you a risk tolerance questionnaire. From this, the advisor can start assessing which program makes sense for you and the right portfolio recommendation.
  4. Review the advisor’s portfolio recommendation: The advisor will then present their recommendation. During this time, you will also negotiate their fee. If you are happy with the terms of the arrangement, you can sign on as a client. The advisor will then provide login information for the different Royal Alliance Associates platforms.
  5. Meet for regular updates: The Royal Alliance Associates brochure says its advisors meet with clients at least once a year to discuss your investments, though you could meet more frequently depending on how the advisor manages their clients. You’ll also receive monthly or quarterly account statements, depending on which program you use.

Where Royal Alliance Associates is located

Royal Alliance Associates has over 900 offices throughout the U.S. Specifically, it lists locations in the following states in its Form ADV filed with the SEC:

  • California
  • Florida
  • Hawaii
  • Iowa
  • Massachusetts
  • Michigan
  • Minnesota
  • Missouri
  • New Jersey
  • New York
  • North Carolina
  • Ohio
  • Rhode Island
  • Texas
  • Virginia
  • Washington

Is Royal Alliance Associates right for you?

Between an impressive selection of investment programs, low minimum investment requirements and a nationwide network of advisor partners, Royal Alliance Associates offers a lot. However, the firm doesn’t set the actual terms of a client relationship so the experience of working with the firm will depend on which affiliate advisor you sign on with, as they will determine the fees, investment strategies and overall experience.

If you are happy with what your local Royal Alliance Associates advisor has to offer, then you can feel confident that they combine the personalized service of an independent practice with tools from a nationwide network. On the other hand, this makes the process a little inconsistent. Those who want a more standardized experience may prefer working with a firm that has more set requirements, strategies and fees for their advisors.

For more help finding a local advisor, whether they are part of Royal Alliance Associates or not, check out the MagnifyMoney advisor search tool.

The “Find a Financial Advisor” links contained in this article will direct you to webpages devoted to MagnifyMoney Advisor (“MMA”). After completing a brief questionnaire, you will be matched with certain financial advisers who participate in MMA’s referral program, which may or may not include the investment advisers discussed.