Tuesday, 22 September 2020

Review of Beacon Pointe Advisors

Review of Beacon Pointe Advisors
20 May
8:09

Beacon Pointe Advisors, LLC is an independently owned, fee-only financial advisor firm offering financial planning and wealth management services to both individuals and high net worth individuals, with a focus on women and clients going through life milestones. The firm employs 113 investment advisors across 20 offices, most of which are located in California, including its headquarters in Newport Beach. It currently oversees about $9.9 billion in assets under management (AUM).

All information included in this profile is accurate as of May 20, 2020. For more information, please consult Beacon Pointe Advisors’ website.

Assets under management: $9,949,699,273
Minimum investment: $1 million
Fee structure: Percentage of AUM for portfolio management; fixed fees; hourly fees
Headquarters: 24 Corporate Plaza Drive
Suite 150
Newport Beach, CA 92660
www.beaconpointe.com
(949) 718-1600

Overview of Beacon Pointe Advisors

Beacon Pointe Advisors is an independent firm primarily owned by its CEO and founder, Shannon Eusey. In March 2020, Beacon Pointe merged with sister firm Beacon Pointe Wealth Advisors to form a single registered investment firm, Beacon Pointe Advisors. As part of the transaction, private equity firm Abry Partners took a minority stake in the merged firm. Other employees hold a minority interest in the firm.

Eusey founded Beacon Pointe in 2002 based on a business school project, and it has since grown to 20 offices nationwide. Beacon Pointe Advisors has a total of 167 employees who collectively hold more than 100 designations and degrees, such as the highly respected certified financial planner (CFP) and chartered financial analyst (CFA) designations and JD and master’s degrees. Beacon Pointe Advisors currently has $9.9 billion in assets under management, with plans to keep growing.

What types of clients does Beacon Pointe Advisors serve?

Beacon Pointe Advisors serves mostly individuals and high net worth individuals. (For reference, the SEC defines a high net worth individual as someone with at least $750,000 in assets under management or a net worth of over $1.5 million.) While the minimum account balance required for clients is technically $1 million, the firm may waive or reduce that minimum at its discretion, as evidenced by the fact that it serves more individuals than high net worth individuals.

Beacon Pointe Advisors has a particular focus on women investors. In 2011, it founded the Women’s Advisory Institute, aimed at helping female clients. Additionally, half of the firm’s leadership team are women. The firm also specializes in helping multi-generational families; entrepreneurs and business owners; and clients going through financial life changes, such as divorce or the death of a spouse.

In addition to individual investors, Beacon Pointe Advisors works with some charitable organizations, businesses, insurance companies, pension and profit-sharing plans and pooled investment vehicles.

Services offered by Beacon Pointe Advisors

Beacon Pointe Advisors offers both consulting services and a managed account program. Financial planning services fall under the consulting part of the business. Clients interested in financial planning have the option of getting a holistic plan that looks at their entire financial picture and results in the creation of a written financial plan with specific recommendations. Clients can also request limited-scope financial planning focused on a specific goal, such as saving for retirement or paying for a college education.

Other consulting services offered by Beacon Pointe Advisors include assistance with creating an investment policy or asset allocation strategy; recommendations of managers, mutual funds, or custodians; and the monitoring of managers and portfolios on a non-discretionary basis.

Clients in the managed account program have access to the above services as well as investment management on a discretionary basis. That means that the firm invests the money on their behalf and has the authorization to make changes to keep the client’s portfolio in line with their investment policy.

Here is a complete list of services currently offered by Beacon Pointe Advisors:

  • Investment advisory services/portfolio management
  • Financial planning
    • Wealth and retirement planning
    • Estate and tax strategy
    • Insurance review
    • Risk assessment
    • Charitable giving
    • Education planning
    • Tax planning and management
    • Life transitions
    • Generational wealth transfers and legacies
  • Selection of other advisors
  • Retirement plan consulting
  • Workshops and seminars
  • Newsletters and publications

How Beacon Pointe Advisors invests your money

Beacon Pointe Advisors works with each client to learn about their financial situation to create an individual investment policy based on their goals and risk tolerance and the firm’s models. Typically, the firm will include a mix of stocks (domestic and international), bonds, real estate, private equity, hedge funds and real assets.

When possible, the firm recommends investments with active managers who have undergone a rigorous screening process that includes quantitative and qualitative analysis, portfolio analysis and product evaluation. The firm prefers independent managers who invest alongside their clients.

Fees Beacon Pointe Advisors charges for its services

Asset management: Clients in the managed account program pay negotiated asset-based fees, typically ranging from 0.50% to 1.15% of assets under supervision. The maximum rate the firm will charge is 1.65% of assets under management. These fees are in addition to any manager or transaction fees that clients may owe custodians.

Consulting services: For consulting services provided on a one-time or project basis, Beacon Pointe Advisors charges either a fixed, project-based fee, with a typical minimum of $25,000, or an hourly fee that typically runs from $350 to $500 an hour. If the consulting services are provided on an ongoing basis, the firm will charge an asset-based fee. The annual retainer fee for discretionary portfolios generally ranges from 0.20% to 0.50%, while the rate ranges from 0.08% to 0.50% for non-discretionary portfolios. Clients with a portfolio worth more than $500 million typically pay a negotiated fixed fee.

Beacon Pointe Advisors’s highlights

  • Minimal conflicts of interest: Beacon Pointe Advisors is fee-only and employee-owned, which minimizes the firm’s potential conflicts of interest. Since the firm only earns money through the fees its clients pay, it doesn’t have financial incentives to recommend certain products or make referrals.
  • Customized advice: The firm works with each client to create an individualized investment policy from which it makes asset allocation recommendations. This means that each portfolio reflects its owner’s specific financial situation and risk profile.
  • Industry recognition: Together, Beacon Pointe and Beacon Pointe Wealth Advisors have won more than 60 awards in the last 15 years. Recent accolades include appearances on Barron’s list of the top RIA firms in 2019 and Financial Times’ 2019 list of the top retirement advisors. Beacon Pointe Advisors’ CEO and founder, Shannon Eusey, appeared on Worth Magazine’s 2020 list of 50 Women Changing the World.
  • No disciplinary disclosures: The firm has a clean disciplinary record (see more below).

Beacon Pointe Advisors’s downsides

  • High account minimum: Beacon Pointe Advisors requires a $1 million minimum account balance to open an account. This may exclude many potential clients, although the firm may waive the minimum. In fact, its current client base includes more individuals than high net worth individuals.
  • Expensive strategy: The firm’s preference for active management means that clients may pay higher fees within their portfolio, on top of the fees that they pay to Beacon Pointe Advisors. For comparison, the average total fee in the advisory industry is 1.17%, according to a 2019 study by RIA in the Box. In comparison, clients at Beacon Pointe typically pay up to 1.15% of assets under management (with an absolute maximum of 1.65%), plus any underlying transaction and manager costs.
  • Limited geographic footprint: Beacon Pointe Advisors has 20 offices, almost half of which are located in California. While its footprint is growing, clients who want face-to-face service but aren’t located near a Beacon Pointe Advisors office might find it challenging to establish a relationship without convenient access to an office branch.

Beacon Pointe Advisors disciplinary disclosures

Beacon Pointe Advisors does not have any disciplinary disclosures on its record. Registered investment advisors (RIAs) who face disciplinary action, including criminal charges, regulatory infractions or civil actions, must report those incidents on the Form ADV that they file with the Securities and Exchange Commission (SEC).

Beacon Pointe Advisors onboarding process

Interested clients can get in touch with the firm by calling the nearest office. The firm provides each office’s contact information on its website.

Once in contact, advisors work with the client to create either a limited-scope or holistic financial plan and an investment policy based on that plan. The firm then recommends custodians to implement the plan, and clients can either implement the strategy on their own or allow Beacon Pointe Advisors to manage their portfolio on their behalf.

Advisors review client accounts quarterly and aim to meet with clients once a year to discuss portfolio performance and any necessary changes to their portfolio. Clients in the managed account program receive monthly reports from their custodian showing their portfolio and quarterly written reports from their Beacon Pointe Advisors. The firm reviews financial plans as needed, on request form the client.

Is Beacon Pointe Advisors right for you?

Beacon Pointe Advisors may be a good choice for you if you’re located near one of the firm’s 20 offices (or don’t care about face-to-face service), have at least $1 million to invest and are interested in active management for your portfolio. Women investors, in particular, may be well served by the firm, which has a corporate leadership team that’s 50% women. The Beacon Pointe Women’s Advisory Institute also claims to specialize in many of the financial issues and monumental life events facing women investors.

However, Beacon Pointe Advisors also has a relatively high minimum balance, $1 million. Another firm may be a better choice if you don’t have the funds, though it’s worth noting that the firm may waive this minimum at its discretion. Additionally, the firm’s preference for active management may mean that you end up paying higher fees than you would if you went with a firm that prefers passive management.

As is the case when choosing any financial product, it’s important to do your research and ask questions of your advisor to make sure you find the best fit for you.

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Source: https://www.magnifymoney.com/blog/investing/beacon-pointe-advisors-review-ria/

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