1919 Investment Counsel Review - MagnifyMoney
Registered Investment Advisor

1919 Investment Counsel Review

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone and is not intended to be a source of investment advice. It may not have not been reviewed, commissioned or otherwise endorsed by any of our network partners or the Investment company.
How MagnifyMoney Gets Paid ?
Advertiser Disclosure

1919 Investment Counsel LLC provides portfolio management, financial planning and other services to individuals and families, as well as institutions. The group was part of Legg Mason, Inc. until 2014, when it was acquired by the financial services company Stifel Financial Corp. The firm offers multiple investing strategies based on client needs.

The bottom line: 1919 Investment Counsel is a Baltimore-based firm that offers portfolio management, financial planning and family office services, largely to high net worth investors.

  • Socially responsible investing options available
  • Financial planning generally included
  • Fees vary based on asset type

All information included in this profile is accurate as of August 30, 2021. For more information, please consult 1919 Investment Counsel’s website.

Overview of 1919 Investment Counsel

1919 Investment Counsel LLC is the product of a series of mergers and acquisitions over many decades. Notably, in 2004, Legg Mason’s trust and investment subsidiary combined with Scudder Stevens & Clark, which at one time was the largest independent investment advisory firm in the country.

Then, in 2014, the group, known as Legg Mason Investment Counsel, LLC, was sold to Stifel Financial Corp., a publicly traded financial services holding firm with many brands under its umbrella. At that time, the group changed its name to 1919 Investment Counsel, reflecting Scudder’s roots in the investment industry dating back to 1919.

Today, the firm has about 125 employees, around 50 of whom are in investment advisory and research roles. The group includes the Philadelphia-based unit Arthur Karafin Investment Advisors, which operates with different products and fee schedules.

1919 Investment Counsel’s pros

  • Custom accounts: The firm offers a broad menu of investment strategies, and it works with clients with unique needs and guidelines to customize those strategies or even create new strategies.
  • Financial planning included: Typically, the firm’s annual asset-based fee charged covers both portfolio management and financial planning advice around topics such as retirement, executive compensation or estate and tax planning. Other firms may charge clients separately for these services.
  • Socially responsible investing options: The firm has a dedicated team to help clients invest in a manner that mirrors their values. For instance, the firm offers options to weed out companies that engage in objectionable activities, identify companies taking steps to be environmentally friendly or diverse and invest directly in companies that have a positive social impact on society.

1919 Investment Counsel’s cons

  • High minimums for certain services: Although the firm works with many investors who do not meet the SEC definition of a high net worth individual, it requires that clients invest a minimum of $2 million to tap certain services including the equity, balanced and fixed income strategies.
  • Potential conflicts of interest regarding funds: Portfolio managers at 1919 Investment Counsel may recommend that clients invest in funds managed by affiliates, in which case the firm’s parent company may earn more money than it would have had the client gone with an unaffiliated fund. This poses a potential conflict of interest, as the firm may be financially incentivized to make certain recommendations. (It is worth noting that the team will not charge account advisory fees on assets invested in funds managed directly by the firm.)
  • Potential conflicts of interest regarding fees: Because the firm charges different fees for different assets, there may be a conflict of interest, even though this practice is generally intended to lessen client expenses. This is because the firm may have an incentive to invest more of a client’s account in higher-fee assets and less in lower-fee assets, even if this is not in the client’s best interest. 1919 Investment Counsel notes that it addresses this potential issue by ensuring all decisions are made in the client’s best interest.

What types of clients does 1919 Investment Counsel serve?

Most of the firm’s individual clients are high net worth individuals, although there are plenty of individual investors working with the firm who do not have a high net worth. For reference, the SEC defines a high net worth individual as someone with at least $750,000 under an advisor’s management or a net worth believed to be at least $1.5 million.

To work directly with the firm and utilize some specific strategies, new clients are typically required to invest at least $2 million. There is no stated across-the-board minimum to invest in mutual funds or to access the firm’s portfolio management expertise through an outside firm offering wrap accounts.

Services offered by 1919 Investment Counsel

Clients can expect to find portfolio management and financial planning services at this firm. Typically, clients hand over the day-to-day investment decision making to the team in what is known as a discretionary relationship. However, the firm does work with clients who want advice but prefer to make the final decisions themselves, known as a non-discretionary relationship.

The team also manages mutual funds available to the broader investing community. Wealthy families can also find family office services, including assistance with administrative tasks such as payroll management.

Here is a full list of services the firm offers:

  • Investment advisory services
  • Financial planning
  • Family office services, including:
    • Interacting with custodians to effect disbursements for clients
    • Special services such as administering payrolls for clients and concierge services
    • Coordinating outsourced tax preparation and reporting services
  • Selection of other advisors

How 1919 Investment Counsel invests your money

The firm offers multiple investment strategies that reflect clients’ individual needs and objectives.

For equity portfolios, the firm’s core competency is mid- and large-cap — primarily domestic — portfolios, which typically include 30 to 60 individual stocks. An extensive four-step research process that employs both quantitative and qualitative analysis helps the firm narrow down its list of potential investment opportunities.

The team tailors fixed-income portfolios based on clients’ tax status, income needs, time horizon, liquidity needs, quality constraints and any other special considerations.

In addition to stocks and bonds, the firm may also include exchange-traded funds (ETFs) or mutual funds in some strategies. To complement its investment strategies, the firm taps certain third-party managers for their expertise in specific asset classes or styles, including small-cap, alternative investments or real estate. Additionally, 1919 Investment Counsel offers socially responsible investing, including its own related fund.

Fees 1919 Investment Counsel charges for its services

For investment advisory services, clients should expect to pay a fee based on a percentage of their assets under management. In some cases, clients may negotiate a fixed fee instead.

The firm’s standard fee schedule is tiered, and rates vary by strategy. All fees and account minimums are negotiable, however. Below is the annual standard fee schedule that the firm specifies is for clients with at least $2 million to invest.

1919 Investment Counsel Fee Schedule for Equity/Balanced Accounts
First $3 million 1.00%
Next $7 million 0.70%
Next $30 million 0.50%
$40 million and over 0.40%
1919 Investment Counsel Fee Schedule for Fixed Income Accounts
First $3 million 0.50%
Next $7 million 0.35%
Next $30 million 0.25%
$40 million and over 0.20%
1919 Investment Counsel Fee Schedule for Accounts Managed by the Multi-Cap Core Strategy
First $10 million 1.00%
Next $15 million 0.85%
On the balance 0.75%

When different types of assets are mixed in a single account, such as stocks and mutual funds, clients may negotiate separate rates for each asset class. Clients invested only in the mutual fund program pay 0.50% on all assets under management.

Clients typically also owe separate brokerage costs, trading fees and custodian fees, as well as any internal or sales fees for investment products such as mutual funds, ETFs and annuities. However, the rates above do typically cover financial planning as well, though sometimes clients may pay separately for these services based on the scope and timeframe of the financial planning project.

Rather than hire the team directly, some clients access 1919 Investment Counsel’s services through third-party firms that can include wrap accounts, which bundle advisory fees with trading and custodian charges.

1919 Investment Counsel disciplinary disclosures

1919 Investment Counsel discloses no disciplinary events over the last 10 years, thus giving it a clean record. All registered investment advisory firms are required by the SEC to disclose on its Form ADV any disciplinary actions from the last decade against the company or any of its affiliates or employees that would be material to a client when evaluating the firm or the integrity of the management team.

For more information on the firm, you can go to its IAPD page.

1919 Investment Counsel onboarding process

To reach out to 1919 Investment Counsel, potential clients can:

  • Contact one of the firm’s local offices
  • Call the firm’s main number at 844-200-1919
  • Fill out a form provided on its website, which requests basic contact information as well as the topic you’re interested in discussing and your preferred method of communication

If you decide to work with the firm after discussing your needs and objectives, ask the team how often to expect account reviews, as the frequency varies based on factors including account size, the type of investments used and general macroeconomic factors. Accounts should be reviewed at least annually.

You can expect to receive account statements quarterly, directly from the account custodian. If desired, you can also receive quarterly written or electronic account reports from the firm.

Where 1919 Investment Counsel is located

1919 Investment Counsel has nine offices in total, including its headquarters in Baltimore. Specifically, the firm has offices in the following locations:

  • Baltimore
  • New York
  • Cincinnati
  • San Francisco
  • Houston
  • Vero Beach, Florida
  • Birmingham, Alabama
  • Philadelphia (2)

Is 1919 Investment Counsel right for you?

Families looking for both investment advisory and financial planning services bundled together under one fee may consider 1919 Investment Counsel. In particular, wealthy clients with at least $2 million to invest may appreciate the firm’s family office services and willingness to customize accounts based on clients’ unique needs and preferences.

The firm’s limited geographic footprint means clients not located near one of its offices may want to look elsewhere, especially if in-person meetings with your advisor are important to you. As is always the case when choosing a financial advisor, make sure to ask the advisor questions. It is important to make sure you understand and are comfortable with its affiliations and potential financial incentives.

Before deciding on a financial advisor, take the time to consider multiple options to ensure you find the right advisor for you.