Woodbury Financial Services Review

Woodbury Financial Services, Inc. is a registered investment advisory firm headquartered in Oakdale, Minn., east of St. Paul. The firm is made up of a network of more than 800 offices around the country featuring nearly 1,300 advisors. Middle-income and wealthy individuals and families turn to the firm for portfolio management and financial planning services, including the creation of a holistic written financial plan. Woodbury Financial Services also works with certain institutions.

Assets under management (AUM): $15,588,360,622

Minimum investment: None for financial planning and non-discretionary investment advice; portfolio management starts at $5,500

Individual investor to advisor ratio: 40:1

Fee structure: A percentage of AUM, hourly charges, fixed fees, other (solicitor/referral fees)

Headquarters: 7755 3rd Street North Oakdale, MN 55128 Website: www.woodburyfinancial.com Phone: 800-800-2638

All information included in this profile is accurate as of February 17, 2022. For more information, please consult Woodbury Financial Services’ website.

Overview of Woodbury Financial Services

Woodbury Financial Services has been registered with the SEC as an investment advisor since 1997, though its roots extend back to 1968, when the business was founded. Today, the firm is a branch of Advisor Group, one of the largest networks of independent wealth management firms in the country. Advisor Group is a subsidiary of Advisor Group Holdings, Inc. The latter is owned primarily by a group of investors through an investment fund affiliated with Reverence Capital Partners LLC. Other firms under the Advisor Group umbrella include FSC Securities Corporation, Royal Alliance Associates and SagePoint Financial.

Woodbury’s advisors can operate as independent contractors and use their own brand names, but receive resources such as investment strategies, technology, back office and regulatory and operational support from the firm. Today, the team at Woodbury Financial Services consists of more than 3,000 employees, with roughly half of them performing investment advisory roles including research. Many employees are also separately licensed as broker-dealers, meaning they can buy and sell securities for commissions. Many also sell insurance and annuity products.

Together, the group oversees more than $15 billion in assets under management, with plans to grow its advisor team around the country.

What types of clients does Woodbury Financial Services serve?

The bulk of the Woodbury Financial Services’ assets under management comes from individual investors and families. This includes some who are deemed high net worth, which the SEC defines as those with at least $750,000 to invest or a net worth of at least $1.5 million.

The firm also serves select institutions including corporations and businesses, charitable organizations and pension and profit-sharing plans. It can also work with state and municipal government entities and banking or thrift institutions.

Woodbury Financial Services has no minimum investment requirement for many services, including financial planning and consulting, as well as what’s called non-discretionary investment services, where the firm provides investment advice but leaves it up to the client to execute the recommendations. For managed accounts in specific asset allocation models, the investment minimum is $5,500. For your advisor to construct a custom portfolio for you, the minimum investment is $50,000. Requirements to invest with third-party managers vary.

Services offered by Woodbury Financial Services

The firm provides its individual and family clients with portfolio management and general investment advice. Clients can choose whether their advisors have control over the daily trading decisions in their accounts, known as discretionary relationships, or they can establish a non-discretionary relationship, meaning advisors provide recommendations on well-suited investments, but it is the client’s responsibility to actually execute the advice.

The team at Woodbury Financial Services also offers financial planning and consulting, where advisors can provide guidance on a myriad of financial topics, including paying for college and saving for retirement.

Here is a rundown of Woodbury Financial Services’ offerings:

• Portfolio management and advice
• Third-party portfolio management
• Financial planning including a written plan
• Financial consulting on a specific topic, including:
  • Budgeting
  • Business planning
  • Cash flow analysis
  • Philanthropic and charitable planning
  • Debt management
  • Life transition planning
  • Education planning
  • Estate, legacy or multigenerational planning
  • Major purchase planning
  • Special needs planning
  • Research on specific securities or industries
• Broker-dealer services
• Insurance assessment
• Loans against the assets in an investment portfolio
• Educational seminars
• Retirement plan consulting services for employers
• Review of executive benefits for companies

How Woodbury Financial Services invests your money

Advisors at Woodbury Financial Services take into consideration your objectives, time horizon, risk tolerance, needs and overall financial situation when investing your funds. Clients can opt for their advisors to construct a custom portfolio for their needs, using asset allocation planning software and other tools. Alternatively, advisors can recommend an asset allocation model.

The firm’s asset allocation models consist of the following:

• Strategies created by investment managers or your advisor (generally uses mutual funds, exchange-traded products, stocks and/or bonds)
• Mutual funds and exchange-traded funds (ETFs)
• A combination of the two above options bundled into an asset allocation model

Third-party managers including mutual funds and separately managed accounts are also available. However, remember that not every advisor offers every program, so be sure to inquire with each potential advisor about what services and programs they can provide.

To choose these investments, advisors at Woodbury Financial Services rely on their own philosophies, preferences and analysis; the firm does not require advisors to use a certain analysis approach. That being said, common methods of analysis include:

• Fundamental research: Looks at basic factors such as the financial condition and management of a company, as well as overall economic and industry conditions.
• Technical analysis: Uses statistics to determine trends in security prices that may suggest future activity, including using chart patterns, volume and recurring price patterns.

Fees Woodbury Financial Services charges for its services

Fees for portfolio management: For portfolio management, clients can expect to pay an ongoing fee, calculated as a percentage of assets under management. Each of the firm’s advisors negotiates their own rates.

Clients can choose a wrap account, where one bundled fee covers the asset management fee as well as transaction costs. The firm also offers non-wrap accounts, where clients separately pay Woodbury’s management fee as well as per-trade transaction charges. When third-party managers are used, clients also pay them a fee.

Keep in mind that on top of the quarterly fee charged by the advisor, you also may owe internal fees for investments such as mutual funds and ETFs as well as variable annuities.

Fees for financial planning, consulting and non-discretionary investment advice: For financial planning and consulting, as well as non-discretionary investment advice, clients may pay an hourly fee, a fixed fee or an ongoing monthly fee, depending on the work. Hourly fees range from $50 to $300, and fixed or flat fees range from $500 to $10,000 depending on the complexity of the task. Fees are negotiable, but will be listed on your advisory agreement before any planning begins.

Fees for education seminars: Advisors may also offer education seminars for a fee. Sessions may be free or clients could pay up to $300 per session, though group rates are available.

Woodbury Financial Services disciplinary disclosures

Woodbury Financial Services lists a number of disciplinary actions on its record. For reference, the SEC requires all registered investment advisors to disclose on their Form ADV any legal or disciplinary actions — including criminal, civil and regulatory events — against the firm or its employees or affiliates over the past 10 years that a potential client would find material when evaluating the firm or the integrity of its leaders.

Woodbury Financial Services reports the following events:

• In 2021, the firm paid a fine of $1,500 after the Washington Office of the Insurance Commissioner found that the firm did not provide notice nor cancel an individual’s affiliation to its business entity insurance producer license within 30 days of the individual being terminated for cause.
• In 2020, Woodbury Financial Services entered into a stipulation with the New York Department of Financial Services, admitting to allegations that it had failed to report in a timely manner the final disposition of administrative action taken by the California Department of Insurance. Further, it was alleged the firm had provided incorrect and untrue information in its application for life brokers licenses. The firm paid a $4,500 fine and agreed to take steps to prevent similar events from reoccurring.
• In 2018, the firm consented, without admitting or denying the findings, to FINRA allegations that it failed to supervise representatives selling certain variable annuities, failed to provide sufficient training on the products and failed to identify when representatives had problematic rates of variable annuity exchanges. The firm was censured and paid a $250,000 fine.
• In 2017, FINRA alleged the firm disadvantaged certain retirement plan and charitable organization customers who were eligible to buy mutual fund shares without a front-end sales charge. The firm allegedly relied on financial advisors to make key decisions on this issue, but did not provide advisors with the appropriate information or training, and did not put in place systems to detect when customers were paying too much. Without admitting or denying the allegations, Woodbury Financial Services consented and paid a $75,000 fine, as well as restitution to eligible customers totaling $128,583.
• In 2014, Missouri securities regulators charged that the firm failed to detect a representative who was disobeying firm policies on third-party wire transactions. The firm allegedly was not aware that the representative had wired customer funds to a bank account he controlled. The firm paid $150,000 to the Missouri Secretary of State’s investor education and protection fund and paid $20,000 in investigation costs. The firm also resolved the issue with all impacted customers.
• In 2013, the firm paid a $60,000 fine after it consented, without admitting or denying, to FINRA’s allegations that it did not keep certain electronic business-related communications from 2007 to 2011 for a group of associated persons.
• In 2012, without admitting or denying the findings, the firm consented to allegations from FINRA that between 2008 and 2009 it had failed to appropriately monitor for excessive equity trading, and thus did not detect a representative who placed excessive trades in two customer accounts. The firm paid a $45,000 fine.

Additionally, Woodbury Financial Services discloses many actions against individuals affiliated with the firm, as well as against affiliated firms including Sagepoint Financial, Inc, FSC Securities Corporation and Royal Alliance Associates, Inc. Look up any related firms or individual advisors you’re considering at Investor.gov/CRS.

To learn more about Woodbury Financial Services’ disclosures, visit the firm’s Investment Adviser Public Disclosure (IAPD) page, where you can find its Form ADV and other public disclosures and documents.

Woodbury Financial Services onboarding process

1. Find an advisor: Chances are that you’ll find a potential advisor and then learn they are partnered with Woodbury Financial Services, since many advisors use their own brand name and don’t market themselves under Woodbury Financial Services. In fact, the firm lists nearly 200 other brand names. Similarly, some advisors offer their services on the premises of unaffiliated financial institutions, such as banks or credit unions, and give the financial institution a cut of the client’s advisory fee. Thus, how you find the advisor and establish your relationship with the firm will vary by advisor.
2. Sign a client agreement: You will sign a written client agreement before any financial planning begins, or before any trades are placed in a discretionary account. This will outline the services expected and the associated fees.
3. Receive regular account reviews and reports: Advisors must review your account at least annually. Clients can expect to receive monthly or quarterly account statements depending on the program.

Where Woodbury Financial Services is located

Woodbury Financial Services has offices in a number of states, including:

• Arizona
• California
• Colorado
• Illinois
• Michigan
• Minnesota
• Missouri
• Nebraska
• New York
• North Carolina
• Tennessee
• Texas
• Wisconsin

Is Woodbury Financial Services right for you?

Working with an advisor who is part of Woodbury Financial Services may be appropriate if you’re looking for portfolio management, general investment advice or financial planning in your local area. The firm’s large network means there may be an office near you. Additionally, the low minimum investment requirement means even clients without six figures to invest can find services here.

That said, because Woodbury Financial Services is a network of many independent contractors who use their own brand names, it may be challenging to find these affiliated advisors. Similarly, because advisors set their own fee rates, you won’t know upfront how much you’ll pay without reaching out to each individual advisor. Thus, clients just starting their advisor search or who want to know upfront what they’ll pay may find it less time-consuming to look elsewhere. There are enough advisor options that everyone should be able to find an advisor who meets their unique needs and makes them feel comfortable.