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Updated on Tuesday, July 14, 2020
Stratos Wealth Partners, Ltd. is an independent investment advisory firm headquartered in Beachwood, Ohio, which is located southeast of Cleveland. The firm has built a national network of financial advisors who are largely independent contractors. These advisors offer financial planning, portfolio management and other services primarily to individual investors as well as to certain institutional investors, such as charitable organizations. The firm’s team of about 475 employees is responsible for $5.7 billion in assets under management (AUM).
All information included in this profile is accurate as of July 14, 2020. For more information, please consult Stratos Wealth Partners’ website.
|Assets under management: $5,707,041,745|
|Minimum investment: None for financial planning; varies by account for portfolio management, starting at $10,000 for an in-person advisor|
|Fee structure: A percentage of AUM; hourly charges; fixed fees|
|Headquarters:||3750 Park East Drive|
Beachwood, Ohio 44122
- Overview of Stratos Wealth Partners
- Which types of clients does Stratos Wealth Partners serve?
- Services offered by Stratos Wealth Partners
- How Stratos Wealth Partners invests your money
- Fees Stratos Wealth Partners charges for its services
- Stratos Wealth Partners’ highlights
- Stratos Wealth Partners’ downsides
- Stratos Wealth Partners disciplinary disclosures
- Stratos Wealth Partners onboarding process
- Is Stratos Wealth Partners right for you?
Overview of Stratos Wealth Partners
Stratos Wealth Partners was founded in November 2008 by its current CEO, Jeffrey Concepcion. Today, the registered investment advisor (RIA) has more than $5.7 billion in assets under management (AUM), with plans to grow larger.
Of its team of 476 employees, 288 serve in investment advisory roles. Some of the firm’s employees are also separately licensed as broker dealers and insurance agents, and a handful work as registered investment advisors for other investment advisory firms as well.
The firm’s advisors, who are spread across 95 offices, are generally independent contractors. Thus, they may market their services under their own name or brand, but still work for and are registered under Stratos Wealth Partners. The firm’s network of advisors receive services such as compliance, technology, operations and marketing support from the firm.
Additionally, many of these advisors hold equity in the firm’s owner, Stratos Wealth Holdings, LLC. Stratos Wealth Holdings also owns the registered investment advisor Fundamentum, which primarily acts as a sub-advisor and offers portfolio options to clients of Stratos Wealth Partners.
Which types of clients does Stratos Wealth Partners serve?
Most of Stratos Wealth Partners’ clients are individual investors, including trusts, estates and IRAs. The firm also serves some high net worth investors, who the SEC defines as those with at least $750,000 in assets under management or an overall net worth of at least $1.5 million.
Rounding out the firm’s client list are institutional investors, such as charitable organizations, pension and profit-sharing plans, banking and thrift institutions, corporations and other businesses.
There is no minimum asset amount required for the firm’s financial planning services. For investing services, the minimum investment varies by account type:
- The robo-advisor program, offered through LPL Financial using FutureAdvisor, requires a $5,000 investment.
- The Managed Account Program requires clients to invest at least $10,000.
- Other third-party investment advisors may require minimums ranging up to $250,000.
Services offered by Stratos Wealth Partners
Stratos Wealth Partners primarily offers portfolio management and financial planning to individuals and families.
Financial planning services: For financial planning, potential issues addressed may include estate planning, tax planning, retirement planning, insurance, executive compensation, charitable giving and succession planning for individuals and businesses. Clients can opt for the one-time creation of a financial plan, continuous services or hourly consulting services.
Investment management services: As for investment management, clients can choose to have their advisor build a custom portfolio, or choose among various model portfolios and strategies offered by affiliated and unaffiliated portfolio managers. Clients can choose between a wrap program, which bundles advisory, trading and custodian charges into one fee, or pay separately for each of those services. Clients also have access to a robo-advisor through the third party investment manager LPL Financial and its affiliation with FutureAdvisor.
Retirement plan and employee services: The firm also advises certain individuals on their retirement plans, through the Participant Consulting Advice Program. Finally, certain employers pay the firm to provide financial planning services to their employees.
Broker-dealer services: Separately, many of the firm’s advisors are licensed through LPL Financial as broker-dealers. Thus in addition to providing ongoing services for a flat advisory fee, these advisors also buy and sell securities for clients who pay per transaction.
Here is a full list of services offered by Stratos Wealth Partners:
- Portfolio management (separately managed and wrap fee accounts; discretionary and non-discretionary)
- Financial planning
- Retirement planning
- Estate planning
- Charitable planning
- Education planning
- Business planning
- Tax planning
- Insurance needs analysis
- Cash flow analysis
- Spending analysis and budgeting
- Sports and entertainment management
- Executive planning
- Corporate benefit consulting
- Insurance/risk management
- 401(k) consulting for individuals
- Pension consulting
How Stratos Wealth Partners invests your money
Since investment advisors at Stratos Wealth Partners are generally independent contractors, advisors make their own investment decisions based on the client’s situation. No single firm philosophy exists. Clients can choose to give their advisors full discretion over their account, meaning clients do not sign off on each transaction, or they can retain control of trading decisions, known as non-discretionary management.
As for how client money is allocated, advisors can create custom portfolios based on a client’s goals, risk tolerance and time horizon. Alternatively, clients can choose among portfolios offered by sister firm Fundamentum, which is a registered investment advisor also owned by Stratos Wealth Holdings, LLC. Clients also have access to certain other third-party managers, including LPL Financial, where most of Stratos’ advisors are also registered as broker-dealers.
Client money may be invested across stocks, bonds, ETFs, load and no-load mutual funds, cash and cash equivalents, structured products, annuities and other investments, including alternatives like hedge funds.
Fees Stratos Wealth Partners charges for its services
Investment advisory fees: The annual advisory fee for the firm’s investment management services is typically calculated as a percentage of assets under management. Fees are negotiable and vary by advisor, since each advisor acts as an independent contractor. That said, the firm has instituted a maximum rate for each program that advisors cannot exceed.
For the firm’s managed account programs, including the wrap and the non-wrap accounts, the maximum annual advisory fee a client can pay is 2.25% of assets under management. However, fees can climb higher when third-party investment managers are utilized. For example, the maximum fee charged for advisory programs offered through LPL Financial ranges from 1.20% to 3.00%.
Across all third-party managers, the maximum total fee a client will pay is 3%, which includes a 2% maximum to the Stratos advisor and a 1% maximum to the third-party investment manager. When using third-party managers, clients typically pay the fee to the third-party manager, who then allocates a predetermined amount to Stratos Wealth Partners and the client’s advisor.
Keep in mind that clients who do not have a wrap fee account may still owe trading and custody charges. Clients in both wrap and non-wrap accounts will owe internal fees for mutual funds and ETFs they’re invested in. Since the maximum fee for wrap and non-wrap accounts is the same, Stratos Wealth Partners has a financial incentive to limit trading in wrap accounts since the firm will owe trading fees on those client accounts.
Financial planning fees: Clients pay separately for financial planning services. Fees vary by advisor and service but the firm has instituted maximum rates. Flat fees generally run up to $15,000 per project, although they may go higher depending on the request. Clients can make four installment payments. Hourly fees typically max out at $500 per hour, and advisors will provide an estimate of how many hours they’ll need prior to beginning the work.
Stratos Wealth Partners’ highlights
- Accessible to modest-income investors: The bulk of the firm’s clients are individual investors without seven-figure investment accounts. Clients with as little as $5,000 or $10,000 can find account options available at Stratos Wealth Partners.
- Large geographic footprint. The firm currently has offices in 24 states, with plans to grow larger. In fact, Stratos recently took on outside capital from Emigrant Partners, an arm of New York Private Bank & Trust, to help fund more acquisitions.
- Provides employer-paid financial planning to some workers: In a unique offering, employers can hire Stratos to provide financial planning and consulting advice to their employees. The cost of the planning advice is borne by the employer, though the individuals may still owe commissions and other fees.
- National accolades: The firm ranked No. 16, up from No. 26 the prior year, on Barron’s 2019 list of the country’s top 50 registered investment advisors. The rankings are based on factors such as assets, revenue and quality of practice.
- Clean disciplinary record: The firm reports no disciplinary disclosures. (See more below.)
Stratos Wealth Partners’ downsides
- Potential conflicts of interest: The firm can earn revenue from recommending specific products and services, such as insurance, or from referring clients to specific third-party investment managers, including the affiliated firm Fundamentum. Thus, potential conflicts of interest exist since the firm has a financial incentive to recommend one product over another. Similarly, the firm also has a financial incentive to recommend that clients custody their money at LPL Financial, where most of the firm’s advisors are also registered as broker-dealers.
- No uniform fees and services list: Advisors negotiate their own fees, which means that the same service can carry a different price tag at each advisor. Thus, potential clients won’t know how much they’ll pay for services without shopping each advisor. When shopping, make sure to confirm what services the advisor provides, since not all services are offered by each advisor or in each state.
- Potentially high fees: Firm policy allows clients to pay up to 2.25% to 3% in annual fees, depending on the account and whether third-party investment managers are used. Fees are negotiable and clients may pay less. But when fees approach the high end of that range, clients are paying well above the industry average of total annual fees of 1.17%, according to a 2019 study from RIA in a Box.
- Pays for referrals: Stratos Wealth Partners pays a handful of individuals or firms to solicit advisory clients for them. Advisors also set up offices inside unaffiliated bank branches and pay the bank for access to the location and for client referrals. Thus, potential clients should always ask specifically why the firm is being recommended to them.
Stratos Wealth Partners disciplinary disclosures
The Securities and Exchange Commission (SEC) requires all registered investment advisors to disclose any legal or regulatory actions against the firm, its employees or its affiliates that are material to a client’s evaluation of the firm or the integrity of the management team in its Form ADV paperwork. Stratos Wealth Partners discloses no criminal, civil or regulatory actions over the last 10 years and thus has a clean disciplinary record.
Stratos Wealth Partners onboarding process
To find an advisor in your state, use the firm’s search tool, which is available on its website. Interested parties can also reach out to the firm directly on their contact page. Keep in mind that some advisors use their own brand names but are still affiliated with Stratos Wealth Partners.
Clients typically use LPL Financial, Fidelity, Charles Schwab or TD Ameritrade for custody services, although not all services are available at all custodians. Clients using certain third-party investment managers may need to sign a separate agreement with them.
As for communication with advisors, clients with managed accounts generally have reviews with their advisors at least annually, but may request them more frequently or at certain triggering thresholds. When using third-party managers, clients can expect reviews on an ongoing basis.
Is Stratos Wealth Partners right for you?
Investors can consider Stratos Wealth Partners if they are looking for independent registered investment advisors, unaffiliated with the large banks and financial institutions and who accept clients without a million dollar investment account. Check that one of the firm’s nearly 100 offices is near you if you’d like to be able to sit across the table from your advisor.
That said, you should directly address with each potential advisor their fees and services since no standardized list exists for you to browse in advance. You’ll also want to confirm with the advisor why they are recommending a specific investment, product or custodian, since they stand to earn revenue from making certain recommendations, creating potential conflicts of interest.
Before starting a relationship with any investment advisor, it’s your responsibility to learn how they’re paid and by whom, since firms can earn money from numerous sources. As you shop around and compare your options, make sure to ask the financial advisors questions and do research.