McAdam Financial Review - MagnifyMoney
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McAdam Financial Review

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McAdam Financial is a registered investment advisory (RIA) firm based in Philadelphia with a network of hundreds of advisors. The firm provides financial planning and consulting services and also offers portfolio management. Most of the firm’s employees are also licensed insurance agents. McAdam primarily serves individual investors, with high net worth individuals comprising a small portion of the firm’s current client base.

The bottom line: McAdam is an RIA that offers financial planning and portfolio management, largely to non-high net worth clients.

  • No minimum investment requirement
  • No set fee schedule
  • Emphasis on fundamental analysis

All information included in this profile is accurate as of April 25, 2022. For more information, please consult McAdams’ website.

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Overview of McAdam

Formed as a RIA in 2014, McAdam is privately owned by its founder, Michael McAdam, who also serves as CEO of the company.

The firm offers a broad range of financial planning and consulting services, and manages client portfolios largely on a discretionary basis. McAdam has nearly 270 employees, over 200 of whom perform investment advisory functions.

A look at the founder of McAdam

Before founding McAdam, Michal McAdam was a financial advisor, manager and field vice president at American Express Financial Advisors (currently known as Ameriprise Financial). Since founding McAdam, he has transitioned the firm from a traditional broker-dealer to a so-called hybrid model because, as the firm’s website notes, “he recognized the need for advisors to be able to provide clients with both traditional brokerage products as well as unparalleled fiduciary capabilities as an RIA.”

He contributes to industry publications, and was a CEO Report 2018 Innovator and Entrepreneur Award Winner.

McAdam’s pros

  • No minimum: Because this firm has no minimum requirement for assets under management, it has a low barrier to entry. This means that more individuals might be able to access its financial planning and investment management services. The firm does note, however, that independent advisors may be able to implement their own minimums.
  • Simple approach: With an emphasis on fundamental analysis and asset allocation through exchange-traded funds (ETFs) and mutual funds, McAdam offers a simple approach that many investors can understand.
  • Flexible plans: McAdam offers flexibility in its approach. The negotiable fees for various services, as well as the firm’s wide range of service offerings, make it possible to tailor a plan to your needs.
  • Industry recognition: In the 2021-2022 ranking, the company was recognized by Advisory HQ as a top financial advisor in Philadelphia, where it is headquartered. McAdam was named in 2020 to the annual Inc. 5000 list of fastest-growing private companies in the U.S., and in 2018, it was named a top firm by several rating and review companies.

McAdam’s cons

  • No set fee schedules and potentially high fees: Unlike other firms, which may publish a set fee schedule, you won’t know your rate at McAdam until you engage with the firm. This lack of transparency may make price comparison shopping more difficult. The firm does have set caps on fees, though, and it is open to negotiation on rates, although it should be noted that the maximum annual fees of 2% for financial planning and 2.50% for portfolio management are on the high side compared to average advisory fees, which range from 0.50% to 1.25% of assets under management.
  • Limited investment choices: Those interested in alternative investments, might not be able to readily access these assets through McAdam. While it’s possible to access some vehicles, such as private equity funds and hedge funds, the firm reserves these recommendations for certain investors and notes that managers have “broad discretion” in selecting the investments.
  • Potential conflict of interest: Some of the firm’s advisors might be insurance agents affiliated with McAdam Financial Group, a licensed insurance agency. As a result, there could be a potential conflict of interest, as advisors might be financially incentivized to steer you toward products from which they receive commissions.

What types of clients does McAdam serve?

The vast majority of clients served by McAdam are individuals, with far fewer classified as high net worth individuals. For reference, the Securities and Exchange Commission (SEC) defines a high net worth individual as someone with at least $750,000 under management or a net worth of at least $1.5 million.

McAdam has no stated minimum that clients must meet in order to begin working with the firm. However, certain unaffiliated independent investment managers that the firm works with may impose their own minimums.

Services offered by McAdam

McAdam offers a variety of financial planning and consulting services aimed at individuals and families. These can be offered as standalone products or in conjunction with wealth or investment management services. The scope of the services will depend on a client’s individual needs and the agreement.

When it comes to investment management, McAdam offers both discretionary and non-discretionary services. Most accounts are managed on a discretionary basis, which means the portfolio manager can make decisions without first consulting the client. However, the firm does offer management on a non-discretionary basis, which means the advisor needs to get the client’s permission before making changes. The firm refers to its selection of available services as “Financially Advanced,” due to their customizable nature.

Additionally, McAdam offers services for business owners, such as doctors or lawyers with their own practices, entrepreneurs, CEOs and founders. These specialized services are designed to integrate this group’s unique concerns into their financial plan.

Here is a full list of services the firm offers:

  • Portfolio management
  • Financial planning and consulting services
    • Business planning
    • Cash flow forecasting
    • Trust and estate planning
    • Financial reporting
    • Investment consulting
    • Insurance planning
    • Retirement planning
    • Risk management
    • Charitable giving
    • Distribution planning
    • Tax planning
    • Manager due diligence
  • Business owner services
    • Business continuity planning
    • Owner and executive compensation plans
    • Qualified retirement plans
    • Key employee retention plans
    • Business succession planning

How McAdam invests your money

McAdam customizes portfolios according to a client’s needs. In deciding how to allocate client assets, the firm looks specifically at a client’s risk tolerance, time horizon and goals.

McAdam does use its own proprietary asset allocation models in some cases, but those aren’t disclosed. For the most part, McAdam allocates client assets among ETFs and mutual funds. Additionally, depending on a client’s investment objectives, it may also use individual debt and equity securities, as well as independent managers, privately placed collective investment vehicles and real estate investment trusts (REITs) on a limited basis.

When analyzing portfolios and making investment decisions and suggestions to clients, McAdam uses fundamental analysis. With this method of analysis, an advisor looks at the underlying conditions of a fund or a fund issuer. Some of the factors that are considered as part of fundamental analysis include:

  • The issuer’s management team
  • Fund investment strategies
  • Reputation of the fund or the management firm
  • Past performance
  • How the fund has performed relative to other funds in similar classes

Once an asset allocation is determined and a portfolio is built, the firm reviews the client’s account regularly as needed.

Fees McAdam charges for its services

McAdam’s fees vary depending on which service you receive.

Financial planning and consulting fees: McAdam charges either a fixed fee or a fee based on a percentage of assets under management for its financial planning and consulting services. While these fees are negotiable, rates for asset-based fees generally range up to 2% of net worth or assets annually. The firm also charges fixed fees for certain services, which range from $500 to $25,000. Exact rates are determined based on the types of services provided and the complexity of the client’s needs.

Investment management fees: The firm charges for its investment management services based on a percentage of assets under management, with fees ranging up to 2.50% annually; this fee is also negotiable. In addition to this asset-based fee, clients may incur other costs, including:

  • Transaction fees
  • Short-term redemption fees
  • Mutual fund fees
  • Brokerage fees and commission fees for certain arrangements
  • Orion administrative fee ($45 per year)

These fees might vary based on the custodian and the assets or securities used. Additionally, the firm may offset investment advisory fees based on the amount paid for financial planning or consulting services.

McAdam’s disciplinary disclosures

McAdam has no disciplinary disclosures to report. Because the firm is registered with the SEC, it is required to report material facts about any legal, civil or regulatory actions against the firm, its employees or its affiliates that would be material to clients. The firm reports no such incidents in its Form ADV, paperwork that registered firms must file with the SEC.

For more information, visit McAdam’s Investment Adviser Public Disclosure (IAPD) page.

McAdam’s onboarding process

  1. Get a complimentary consultation: McAdam offers a complimentary consultation to clients before they sign up. You can schedule this consultation by:
  2. Have an initial interview: If you decide to use McAdam Financial, you’ll have an initial interview where the firm will get an idea of what you hope to accomplish with your money.
  3. Receive a plan: After your interview with McAdam, you’ll receive a tailored plan.
  4. Stay in touch: You’ll get regular notice of any changes regarding your account and can expect contact with your advisor at least annually to see if changes need to be made.

Where McAdam is located

McAdam has four official offices, though it also has a network of hundreds of advisors who may be located elsewhere. On its website, the firm lists locations in the following cities:

  • Philadelphia
  • Boston
  • Chicago
  • Tysons Corner, Va.

Is McAdam right for you?

With no minimum investment requirement, McAdam may be an accessible choice, particularly for investors near its four offices. The firm offers investment management services, as well as a range of financial planning and consulting services, making this a one-stop shop for both financial planning and money management.

However, prospective clients should note that the firm does earn commissions from selling products, which could pose a potential conflict of interest. As is the case when making any financial decision, it’s important to ask questions and make sure you understand the fees you’re paying to ensure you’re making the best decision for your money. Also be sure to research multiple firms to ensure you find the right advisor for you.

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.