“> David Rodeck
Wealth Enhancement Group is an investment advisory firm headquartered in Plymouth, Minn. The firm also has more than 30 additional locations throughout the Midwest and across the East Coast, as well as in Texas and Georgia. The firm offers investment management, along with financial planning, tax advice, retirement plan consulting and other services.
Wealth Enhancement Group has 337 employees who work in an advisory capacity, and manages $13.8 billion assets under management (AUM). The firm promotes a team-based experience, where specialists in different financial areas work together to advise clients.
All information included in this profile is accurate as of June 16, 2020. For more information, please consult Wealth Enhancement Groupâ€™s website.
|Assets under management: $13,821,545,449|
|Minimum investment: $25,000, though waivable in certain circumstances|
|Fee structure: A percentage of AUM, up to 2%; hourly charges; fixed fees; fees from third-party investment advisors|
|Headquarters:||505 North Highway 169, Suite 900
Plymouth, MN 55441
Wealth Enhancement Group opened in 1997 out of Minnesota, when four advisors sharing the same office space decided to team up. They believed that by combining services, they could offer clients a better experience where they could handle all of their needs in one place.
Since this original partnership, Wealth Enhancement Group has expanded into a firm with over 30 locations, spread through the Midwest and the East Coast, and Texas. The firm has 355 employees, of which 337 perform investment advisory services. Advisors at the firm hold a wide range of professional credentials in different specialties including the certified financial planner (CFP), chartered financial analyst (CFA) and certified public accountant (CPA) designations, as well as JD and MBA degrees.
The team manages $13.8 billion in assets through the registered investment advisory division Wealth Enhancement Advisory Services, which is a subsidiary of Wealth Enhancement Group. Wealth Enhancement Group is an independent firm, though it is majority owned by TA Associates Management, a private equity firm.
Wealth Enhancement Group works with individuals, trusts, estates, charitable organizations, pensions, profit-sharing plans, corporations and other businesses. The firm does not list any specific client specialties and only notes that it prioritizes working with people who are looking to develop a long-term relationship with their financial advisor.
Most of the firmâ€™s clients are individual investors, split between non-high net worth individuals and high net worth individuals, the latter of whom are defined by the SEC as having at least $750,000 invested with the advisor or a total net worth over $1.5 million. Wealth Enhancement Group has more clients who are non-high net worth, but the majority of the firmâ€™s assets under management come from high net worth clients.
It only takes a minimum investment of $25,000 to open an account with Wealth Enhancement Group, so the firm is accessible for lower-level investors. In addition, Wealth Enhancement Group could accept even smaller portfolios under special circumstances or if the firm has reason to believe the client will reach the minimum within 12 months.
Besides its standard investment management services, Wealth Enhancement Group has other programs with higher minimum portfolio requirements. The ones with high minimums offer a wider range of possible investments and strategies.
|Investment Minimums for Wealth Enhancement Group Programs|
|Program||Minimum Required Investment|
|Standard Investment Management Services||$25,000|
|WEAS Core Program||$30,000 to $250,000|
|WEAS Access Program||$100,000|
|SEI Program||$25,000 to $1 million, depending on the strategy|
|Schwab Managed Account Select Program||$100,000 for most equity styles
$250,000 for fixed income styles
Wealth Management Group Wealth Enhancement Group follows a system called the Roundtable approach, where specialists from different financial fields work together to advise clients. The firm looks at six different areas for each plan: investment management, financial planning, retirement income planning, estate planning, tax strategies and risk management and insurance.
The firmâ€™s financial advisors can design plans with different levels of complexity. They can create comprehensive plans that cover all parts of your financial situation, along with less intensive financial plans, where they give you some recommendations but not for all parts of your financial life. The more complex the plan, the higher the cost. You can also sign up for both ongoing financial planning or for a one-time review of a specific topic.
For investment management, Wealth Management Group typically uses a discretionary system, where advisors can make trades on a clientâ€™s behalf. However, clients can request to use a nondiscretionary approach, where the client must approve trades themselves. Wealth Management Group offers both wrap fee accounts, where trading transaction fees are built into the fixed cost of the program, alongside traditional programs, where clients cover the transaction fees separately.
In addition to advising individuals, Management Group also offers consulting for business owners to help with their retirement plans and other employee benefits. Finally, Wealth Management Group holds seminars, runs a blog and hosts a radio show to teach people about financial topics.
For each individual investor, Wealth Enhancement Groupâ€™s advisors design customized portfolio recommendations. The advisors will look at your risk tolerance, time horizon, goals, tax status and other objectives to create your portfolio. Investments made by the firm tend to focus on long-term purchases, which are defined as investments made for one year or longer, but the firm is willing to make short-term trades when it makes sense.
Wealth Enhancement Groupâ€™s investment philosophy is based on four broad principles: diversification, cost efficiency, tax efficiency and active management. Through diversification, the firm looks to minimize risk by building portfolios with a mixed asset allocation. Wealth Enhancement Group also believes that through its size and experience, it can help clients save money on trades and also on their taxes.
Finally, the firm believes its advisors can find investments that earn above-average market returns through active management. While the firm primarily uses passive, broad market investments to keep costs low, advisors still research chances to generate Alpha based on factors like momentum, valuations and volatility. (Alpha is the extra gain on an investment above its comparable benchmark. So for a stock portfolio, how much more it earns above the S&P 500 return.)
As noted earlier, Wealth Enhancement Group has a few different programs with different investment minimums. The one you sign up with determines what kinds of investments are available along with what type of advice you receive:
For investment advice, Wealth Enhancement Group charges clients based on a percentage of assets under management. This asset-based fee covers both the firmâ€™s investment advisory services and administrative work. The advisors do not earn a fee for their performance, but they can earn commissions for selling certain investments.
The Wealth Enhancement Group brochure states that its maximum fee is 2%, though its website notes that it typically keeps fees within 1% to 1.50% of assets under management. Clients negotiate their costs when they first sign up, and your rate will depend on your portfolio size and the complexity of your needs. Clients may also be responsible for covering brokerage costs and other investment fees, unless they are in a wrap fee program, which includes these costs already.
Wealth Enhancement Group also works with multiple third-party advisors and platforms to offer investments. In these cases, the fees can be different and exceed 2%. However, Wealth Enhancement Group notes that the maximum it will earn is 2%, with the excess going to the third party.
While Wealth Enhancement Groupâ€™s fee schedule depends on each clientâ€™s situation, the firmâ€™s brochure lists these ranges as an example:
|Wealth Enhancement Group Sample Fee Schedule|
|Total Portfolio Size||Asset Under Management Fee|
|$999,999 and below||1.50%|
|$1,000,000 to $2,000,000||1.25%|
|$2,000,000 and above||1.00%|
If a client wants standalone financial planning, they can pay by the hour or by the plan. Wealth Enhancement Group charges an hourly rate of up to $600 an hour or a flat fee of between $250 to $25,000 for a plan, depending on the complexity. For retirement plan consulting, Wealth Enhancement Group charges either up to $600 per hour or an asset-based fee of up to 1%.
Wealth Enhancement Group does not have any legal or disciplinary events to disclose on its filings, showing that the firm and its advisors have a clean record. The SEC requires RIAs to disclose any major disciplinary incidents from the past 10 years on both their Form ADV filing and their company brochure. These disclosures should include any criminal charges, government fines or sanctions and civil suits.
If youâ€™d like to learn more about working with Wealth Enhancement Group, you can request a meeting through the firmâ€™s website. You just need to enter your name, contact information and portfolio size. You could also contact the office closest to you to get paired with a nearby advisor. There is no cost for this initial consultation.
During the first meeting, the advisor will collect your financial and investment information, while discussing your goals, risk tolerance and time horizon. They will then share this information with their team of different financial specialists to put together your portfolio recommendation and a fee quote.
If you sign on as a client, your advisor will monitor your portfolio and make changes as needed. The firm aims to maintain investments long-term, meaning it will wait at least a year before making changes, but if you hit your goals early, advisors are willing to make more frequent changes.
If youâ€™re looking for an advisor that covers all parts of your financial plan â€” not just investments â€” Wealth Enhancement Group could be a good choice. Through its team-based approach, youâ€™ll get feedback from experts across all areas. You can get this high level of service even as a smaller investor, as you can open a plan with Wealth Enhancement Group for just $25,000. Finally, with locations throughout the Midwest and the East Coast, as well as Texas and Georgia, the firm has a large footprint and is accessible for investors in many parts of the country.
On the other hand, Wealth Enhancement Group might not be a good choice if youâ€™re trying to control costs. The firm can charge fairly high fees, with its maximum asset-based fee ranging up to nearly double the national average. In addition, the firmâ€™s active management style could also drive up your costs if you arenâ€™t in a wrap fee program. Finally, advisors can earn commissions for recommending certain products, which could pose a potential conflict of interest that can also get in the way of a cost-effective portfolio.
As is always the case when making a decision regarding your financial life, youâ€™ll want to take the time to research several options and ask questions of your financial advisor to ensure you understand the costs involved and the level of service offered.