Key Investment Services is a division of KeyCorp with offices throughout the country. This registered investment advisor (RIA) has 300 financial advisors, works with over 21,000 individual investors and provides both financial advice and brokerage services to its clients.
KIS uses model portfolios from third-party brokerages to help manage client assets, and the firm provides investment services like retirement accounts and education savings plans, in addition to its wealth management and retirement planning.
The bottom line: Key Investment Services provides financial planning and asset management services to individual investors, a vast majority of whom are not high net worth individuals.
|Assets under management (AUM): $3,448,581,641|
|Minimum investment: $5,000|
|Individual investor to advisor ratio: 70:1|
|Fee structure: A percentage of AUM|
|Headquarters: 4900 Tiedeman Road, Brooklyn, OH 44144
All information included in this profile is accurate as of October 28, 2021. For more information, please consult Key Investment Services’ website.
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Key Investment Services was established in 2005 and is headquartered in Ohio, as part of KeyCorp. In addition to the financial advisory services provided by KIS, another entity under the corporation is KeyBank, offering commercial banking products like deposit accounts, loans and credit cards. KeyCorp is a publicly-traded company.
The firm primarily works with individual investors, most of whom aren’t considered high net worth individuals (those with at least $750,000 in assets under management or a net worth that’s believed to be at least $1.5 million). The firm requires just $5,000 to invest in one of its model accounts, and it rarely works with clients other than individuals.
KIS provides basic types of investment management for individuals, like retirement planning or saving for future educational expenses. KIS offers customized financial planning and portfolio management as part of their managed accounts.
In addition to brokerage services, the firm also advises clients on the purchase of insurance policies. Some of those policies may be available through KeyCorp Insurance Agency, which presents a conflict of interest — especially since KIS advisors receive commissions on the sales of those products.
Like many investment advisor firms, Key Investment Services relies on model portfolios for their clients. KIS partners with Lockwood Advisors to provide wrap-fee AdvisorFlex Portfolios: AFP is a series of model portfolios that can be used according to a client’s reported preferences or at their discretion. The firm’s WealthStart Program through Lockwood is similar, but has lower minimums to open an account. KIS also provides model portfolios through BlackRock, Calvert and Vanguard.
Key Investment Services offers a few options when it comes to investing your money. Lockwood’s AFP and WealthStart Program are two options, as is the Lockwood American Funds Program. Some of KIS’s investment strategies are called Model Strategies Programs and involve strategic asset allocation models devised by third-party brokerages.
Among the portfolios currently offered to new clients are:
KIS also offers Key Select Portfolios; these are designed by their affiliate, KeyBank. That program involves 11 types of allocation models (known as “Key Models”) with varying degrees of risk within the context of diversified portfolios. While financial advisors won’t be compensated for recommending Key Select Portfolios to their clients, they will be aware that those investment accounts will benefit KeyBank more than any non-KeyBank sponsored programs — another conflict of interest.
Some clients are part of the Separately Managed Accounts Program, in which KIS pairs the clients with a third-party investment manager who handles various aspects of financial planning including portfolio selection, supervision and reporting. KIS assists in evaluating whether those third-party managers are appropriately managing their clients’ portfolios.
|Portfolio name||Investment strategy|
|Russell Model Strategies||Five diversified portfolios spanning risk/return spectrum|
|Calvert Responsible Model||Socially responsible equity, fixed income and multi-asset strategies|
|BlackRock Target Income||Four fixed income model portfolios for those in retirement|
Key Investment Services charges a percentage of AUM as part of a wrap fee: Instead of charging additional costs like trading fees and expense ratios on securities, KIS wraps all of their fees into a flat number that’s calculated as a percentage of AUM.
There is a minimum wrap account fee of $32.50 per quarter or $130 per year for clients who wouldn’t otherwise meet that threshold with their percentage of AUM. The firm pays Lockwood a money management fee, which doesn’t affect fees that are applicable to the client’s account.
The fees listed below are the maximum amount that can be charged for two main Key Investment Services accounts. Their model strategies are offered by several third-party brokerages, and fees are negotiable per the discretion of KIS. Likewise, fees for the Separately Managed Account program, which is conducted with Lockwood, are negotiable as well.
|Model Strategies* — Minimum varies by account type|
|$0 – $500,000||1.80%|
|$500,001 – $1,000,000||1.30%|
|$1,000,000.01 or more||1.00%|
*Except for Vanguard Program II
|Separately Managed Account — Generally $100,000 minimum|
|First $500,000||3.00% (Equities/Balanced), 2.00% (Fixed Income)|
|Next $500,000||2.50% (Equities/Balanced), 1.75% (Fixed Income)|
|Next $1,500,000||2.00% (Equities/Balanced), 1.50% (Fixed Income)|
|Remainder||1.50% (Equities/Balanced), 1.50% (Fixed Income)|
Key Investment Services reports some disciplinary disclosures on its Form ADV, noting that the firm has been involved in violations of a self-regulatory organization or commodity exchange’s rules. Disciplinary disclosures can include regulatory or criminal complaints against a firm and/or its employees. The disclosures reported by KIS are regulatory in nature.
In 2019, KIS agreed to pay fines and restitution to conclude an investigation by the Financial Industry Regulatory Authority, Inc. (FINRA) into issues relating to the firm’s compliance with its suitability obligations. Among the findings of that investigation were that KIS failed to enforce its supervisory procedures regarding customer-specific suitability factors when recommending securities, and that the firm provided inaccurate information to customers on 189 occasions regarding investment expenses.
In 2016, there was a similar agreement to conclude a different investment by the FINRA: Key Investment Services paid fines and restitution after it failed to apply sales charge discounts to certain customers, resulting in those customers paying excessive sales charges.
That FINRA uncovered issues with the firm’s compliance with its suitability may be a concern for investors who work with an entity with a fiduciary responsibility, but ultimately the regulatory actions taken against the firm were minimal. Key Investment Services paid out less than $2 million in penalties related to the investigations — a tiny fraction of the assets managed by the firm.
To get started with KIS, you can submit an inquiry on their website or over the phone at 888-547-2968. On the firm’s website, you’ll be prompted to submit some information including your email and phone number in order to schedule an introductory meeting with a KIS representative. Before any investment decisions are made, you’ll fill out a questionnaire to determine your risk tolerance.
Once you agree to the terms of your relationship with a financial advisor, as well as the strategies you’ll implement, you can expect KIS to complete an annual review regarding your portfolio’s performance. And though the firm doesn’t schedule any periodic reviews or updates, you can still request those reviews or receive one when there are significant changes to your financial picture.
Key Investment Services is located in seven states:
Key Investment Services is authorized to do business in most states in the U.S. (Exceptions include Iowa, Kansas, Louisiana, Montana, North Dakota or South Dakota — as well as Washington D.C. and some U.S. territories.)
Key Investment Services is best for investors who wish to take a more active role in managing their portfolios beyond using a robo-advisor, but don’t have a lot of money to invest and want to rely on model portfolios from third-party brokerages. Those with an existing banking relationship with KeyBank may find it worthwhile to consider Key Investment Services, especially if they’re managing more modest investments.
KIS works heavily with individual investors who aren’t classified as high net worth individuals. Those who wish to work more closely to customize a portfolio with a financial advisor, or those with significant assets to manage, may find it more difficult to meet those needs with KIS. MagnifyMoney can help you find the right financial advisor to help you reach your financial goals.
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.