Wednesday, 23 September 2020
Updated on Friday, September 11, 2020
1919 Investment Counsel LLC provides portfolio management, financial planning and other services to individuals and families, as well as institutions. The firm’s team of roughly 125 employees is spread across 10 offices. The group was part of Legg Mason, Inc. until 2014, when it was acquired by the financial services company Stifel Financial Corp. and rebranded as 1919 Investment Counsel. The firm currently oversees $15 billion in assets under management (AUM).
All information included in this profile is accurate as of September 11, 2020. For more information, please consult 1919 Investment Counsel’s website.
| Assets under management: $15,117,313,398 | |
| Minimum investment: Varies by account type | |
| Fee structure: A percentage of AUM, fixed fees | |
| Headquarters: | One South Street, Suite 2500 Baltimore, Maryland 21202 1919ic.com (410) 454-2171 |
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 1919 Investment Counsel team has about 50 employees in investment advisory and research roles. With headquarters in Baltimore, the firm has an additional nine offices in Birmingham, Alabama; Philadelphia; New York; Cincinnati; San Francisco; Houston; Dallas; and Vero Beach, Florida.
The group includes the Philadelphia-based unit Arthur Karafin Investment Advisors, which operates with different products and fee schedules.
1919 Investment Counsel serves individuals and families as well as institutions and businesses. Nearly half of the firm’s individual clients are considered high net worth individuals, which the SEC defines as those with at least $750,000 in assets under management or a net worth of at least $1.5 million.
No across-the-board minimum exists to invest in mutual funds, or to access the firm’s portfolio management expertise through an outside firm offering wrap accounts, for which investment minimums vary by account type. To work directly with the firm and utilize some specific strategies, however, new clients are typically required to invest at least $2 million.
Rounding out the firm’s client list are charitable organizations, pension and profit-sharing plans, endowments, foundations, government-related entities, investment companies, corporations and individual retirement plans.
Clients can expect to find portfolio management and financial planning services at 1919 Investment Counsel. 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 certain 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 offered:
All together, 1919 Investment Counsel offers more than a dozen investment strategies. Some strategies also include mutual funds and exchange-traded funds (ETFs) in addition to stocks or bonds.
For equity portfolios, the firm’s core competency is mid- and large-cap — primarily domestic — portfolios, which typically include 30 to 60 individual stocks. The firm generally favors companies of high or improving quality that have competitive advantages over their peers. An extensive four-step research process that employs both quantitative and qualitative analysis helps the firm narrow down its list of potential investment opportunities.
As for fixed income portfolios, the team tailors portfolios based on each client’s specific needs. This includes their tax status, income needs, time horizon, liquidity needs, quality constraints and any other special considerations.
To complement its strategies, 1919 Investment Counsel 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. There is a team of social research analysts who conduct their own research on social issues and domestic and international companies
For investment advisory services, clients should expect to pay a fee based on a percentage of their assets under management. In some cases, clients negotiate a fixed fee instead.
The standard fee schedule for 1919 Investment Counsel’s services is tiered, and varies by strategy. All fees and account minimums are negotiable, however.
| 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% |
| 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% |
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.
Keep in mind that clients typically also owe separate brokerage, trading and custodian fees, as well as any internal or sales fees for investment products like 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. The firm also may provide a la carte financial planning services to clients who are not already working with the firm.
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 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 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.
To reach out to 1919 Investment Counsel, potential clients can call the firm or 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.
When setting up your account, ask the team how often to expect account reviews, since the frequency varies based on factors including account size, the type of investments and general macroeconomic factors. You can expect to receive account statements quarterly, directly from the account custodian.
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 find attractive 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 the 10 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.
Source: https://www.magnifymoney.com/blog/investing/1919-investment-counsel-review-ria/
