First Republic Investment Management Review

Are you looking for a financial advisory firm with access to public and private investment funds? San Francisco-based First Republic Investment Management may be an option for you. The firm, which has offices from coast to coast, manages billions of dollars in client assets and offers various financial planning services.

However, First Republic has paid millions of dollars back to clients in recent years following allegations of misconduct from the U.S. Securities and Exchange Commission (SEC). MagnifyMoney is here to break down the firm’s services and make sense of its regulatory disclosures.

First Republic Investment Management might be best suited for investors who:

• Can afford the firm’s $7,500 minimum annual fee
• Seek access to private funds and alternative investments exposure
• Value environmental, social and governance (ESG) principles

Assets under management (AUM): $136,818,578,467

Minimum investment: None specified, but a minimum annual fee of $7,500 is required for investment advisory services

Individual investor to advisor ratio: 37:1

Fee structure: A percentage of AUM, fixed fees, performance-based fees

Headquarters: 111 Pine Street, San Francisco, CA 94111   Phone: 800-392-1400   First Republic Investment Management website and SEC Form ADV

All information included in this profile is accurate as of Aug. 24, 2022. For more information, please consult First Republic Investment Management’s website.

Overview

First Republic Investment Management is the wealth management arm of First Republic Bank, a publicly traded commercial bank founded in 1985. While its headquarters are in San Francisco, you won’t need to venture across the Golden Gate Bridge to become a client. The firm has an extensive geographic footprint with nearly 600 advisors spread across 10 states and the District of Columbia.

First Republic is a full-service firm that can help you with various financial needs, including portfolio management, financial planning, insurance and transferring your wealth to future generations. The firm offers a deep pool of investment options ranging from passively managed index funds to private funds focused on alternative investments.

The firm can also provide specialized consulting services for affluent clients and their families. For example, First Republic can help prepare your beneficiaries and heirs to manage your family’s portfolio in the future.

With a range of services designed to meet straightforward and more complex financial needs, First Republic is likely best suited for affluent clients looking for comprehensive wealth management.

First Republic Investment Management’s ideal clients

First Republic works with thousands of individual clients above and below the high net worth threshold, although high net worth individuals comprise most of First Republic’s client base and AUM. You’re considered a high net worth investor if you have at least $1 million in investable assets.

• Established investors. The minimum $7,500 annual fee may prove too high for new investors.
• High net worth clients. The firm offers financial planning, wealth transfer and family consulting services for highly affluent clients.
• Investors looking for a robo-advisor. First Republic also offers a robo-advisory service called Eagle Invest, which only requires a minimum investment of $5,000.

First Republic Investment Management’s fees

Like most financial advisory firms, First Republic bases its fees for investment management on how much you have invested with the firm, also known as assets under management (AUM). AUM fees range from 0.45% to 1.50% for equity/balanced portfolios and 0.30% to 0.40% for fixed income portfolios.

When enrolled in an equity/balanced portfolio, the firm calculates your AUM fee according to how much money you have at each asset tier. For example, you’ll pay 1.50% on the first $2 million in your account, 1.25% on the next $3 million and so on. For fixed income, you’ll pay a single flat fee based on the total fixed-income assets you hold.

Keep in mind: If you have less than $500,000 invested with First Republic, the $7,500 minimum means your annual AUM fee will likely be higher than the 1.50% stated above. For instance, a $250,000 portfolio paying the minimum annual fee would pay a 3% AUM fee per year, which is quite high.

Beyond asset-based fees, you may occasionally pay other fees, such as:

Fixed fees: You can expect to pay a fixed fee for financial planning, consulting, family engagement and governance services. The firm doesn’t publish rates for these services, which are negotiable and vary based on the scope of your needs.

Performance-based fees: If you invest in private funds like the Eagle Alternative Investments Funds, you may pay performance-based fees. When a fund outperforms a set benchmark, its manager will receive a predetermined fee. Performance-based fees may incentivize a fund manager to take on more risk to produce higher returns.

Robo-advisor fee: First Republic charges an annual AUM fee of 0.40% for clients of its robo-advisory platform, Eagle Invest.

Internal fund fees: You may also be subject to brokerage fees and commissions charged by the financial institution acting as custodian for your account, mutual fund expense ratios and other fees charged by the companies that provide the different securities in your portfolio.

Lastly, it’s important to note that First Republic advisors may earn fees when making certain recommendations, including First Republic Bank products and services. This fee-based model represents a conflict of interest because your advisor has a financial incentive to recommend particular products over others that may be more appropriate for you.

Services offered

Whether you have $5,000 or $5 million to invest, First Republic has a variety of services for a range of clients. However, the firm’s financial planning, private funds and family consulting services may appeal most if you have a high net worth.

Some of the services First Republic offers include:

• Wealth transfer, family consulting and trust services
• Investment management
• Robo-advisor platform
• Financial planning
• Wrap fee program

First Republic Investment Management’s pros and cons

Investment strategy

First Republic has an asset allocation committee chaired by its chief investment officer that develops investment strategies for its equity/balanced portfolios. For fixed-income portfolios, the firm uses active management and emphasizes a rotation of different types of debt. Both approaches may rely on different asset classes, including individual securities, mutual funds, exchange-traded funds (ETFs) and private investment funds that the firm manages.

Most client accounts and AUM are managed on a discretionary basis, meaning advisors have the autonomy to make individual trades and transactions without your approval. But if you’re looking for investment recommendations instead of direct management, First Republic offers nondiscretionary advisory services, too.

Finally, if you’re keen on socially responsible investing (SRI) and ESG investing principles, First Republic prioritizes these considerations in its investment recommendations.

Disciplinary disclosures

First Republic reports two disclosures in the past 10 years.

In 2022, the SEC alleged that First Republic failed to disclose conflicts of interest related to revenue-sharing payments made to the firm’s affiliated broker-dealer between 2014 and 2018 and 2019. According to the SEC, the firm “purchased, recommended or held” mutual fund share classes and money market funds for clients without disclosing the conflicts, which constituted breaches of fiduciary duty. First Republic agreed to pay a $250,000 civil fine, $1,332,664 in disgorgement and $243,289 in prejudgment interest to affected clients.

In 2019, the firm paid a $924,661 disgorgement and $80,532 in prejudgement interest after the SEC alleged it purchased, recommended or held mutual funds for clients that paid advisors 12b-1 fees between 2014 and 2018. The SEC alleged lower-cost share classes were available and censured the firm.

First Republic Investment Management consented to both SEC orders without admitting or denying the government’s findings.

Locations

• Boston
• Honolulu
• Portland, Ore.
• Santa Barbara, Calif.
• Encino, Calif.
• Washington D.C.
• Paramus, N.J.
• Menlo Park, Calif.
• Jackson, Wyo.
• San Francisco
• Napa, Calif.
• Bellevue, Wash.
• San Diego
• New York
• Jupiter, Fla.
• Palm Beach, Fla.
• Palo Alto, Calif.
• Boca Raton, Fla.
• Greenwich, Conn.
• Scarsdale, N.Y.
• Los Angeles
• Newport Beach, Calif.

Is First Republic Investment Management right for you?

First Republic Financial Management may be one to consider if you’re looking for a full-service financial advisory firm with offices from coast to coast. The firm serves individual clients above and below the high net worth threshold, but it has specific services that may be more appealing if you’re an affluent investor.

And even if First Republic isn’t your ideal fit, MagnifyMoney can help you find a firm that might better align with your needs and goals. Simply enter your information in the box below and we’ll help you find the trusted financial partner you deserve.

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.