Advisors Asset Management
Headquartered in Monument, Colorado, Advisors Asset Management functions as a registered investment advisor (RIA) and subsidiary of Advisor Asset Management Holdings, Inc. What's unique about the firm is that it functions as both a RIA and registered broker-dealer, and it specifically caters to financial professionals and their clients.
The fee-only financial advisor has more than $2.8 billion in regulatory assets under management (AUM). The firm also has multiple offices throughout the U.S., and it manages more than 1,600 clients.
Advisors Asset Management Background
Advisors Asset Management was founded in 1979. Since then, it has worked to provide holistic portfolio solutions to a range of clients. But the firm differs from the average RIA in that it provides services designed to benefit other financial professionals and their clients. Advisors Asset Management’s client base also includes broker-dealers, and along with its RIA status, the firm is a member FINRA/SIPC.
Some of the products and accounts the firm specializes in include open- and closed-end mutual funds, unit investment trusts (UITs), separately managed accounts, structured products, portfolio analytics and exchange-traded funds (ETFs).
Advisors Asset Management Client Types and Minimum Account Sizes
Advisors Asset Management’s clients include high-net-worth and non-high-net worth individuals, trusts, estates, broker-dealers, charitable organizations and pension or profit sharing plans. The firm also offers services to its sponsored UITs, as well as open-end investment management companies.
The minimum account size Advisors Asset Management requires depends on both the account type and the strategy under which it’s based. For direct accounts with fixed income strategies, the firm requires $250,000. Direct accounts with equity strategies require a $100,000 minimum account size. Clients using platform accounts need a minimum of $125,000 for fixed income strategies. For platform accounts using equity strategies, the firm requires a $100,000 minimum.
Services Offered by Advisors Asset Management
Advisors Asset Management offers supervisory services to UITs, as well as investment portfolio management services, distribution services and other products.
- Investment Solutions
- Mutual Funds
- Managed Accounts
- Exchange-traded funds
- Fixed income
- Structured products
- Sales and Distribution
- Mutual Funds
- Managed Accounts
- Exchange-traded funds
- Bond Services
- Portfolio Support
- Technological Services
Advisors Asset Management Investment Philosophy
Advisors Asset Management believes in equipping financial professionals with the tools they need to help its clients succeed. More specifically, the firm says it strives to understand and manage the risks that interest rates and credit exposure pose to fixed income portfolios. The firm describes its approach to investment management as one that implements fundamental, technical and charting analysis to forge client-specific investment strategies. Through its fundamental approach, the firm analyzes businesses from a holistic approach. Its assessment may include everything from a business’ financial statements and management, to its competitors and competitive advantages. With its technical approach, however, the firm works to identify and exploit price patterns and market trends. The firm uses charting to identify trends for individual securities.
Advisors Asset Management applies four steps to its investment process. First, it selects investments relative to its tactical duration targets. The firm then selects investments relative to the credit exposure value which complements the firm’s macroeconomic perspectives. The firm also selects investments in relation with spread analysis, maturity, coupon, duration and credit quality. Finally, Advisors Asset Management aims to structure portfolios in ways that diversify maturity and duration exposure. Through the final step the firm also strives to diversify across capital structure, revenue source, geography, issue characteristics and position sizing.
The firm has an Investment Committee that meets quarterly and reviews economic, macroeconomic and market conditions. The committee uses the meeting to determine investment strategies in relation to such conditions. Advisors Asset Management also employs long-term and short-term purchases and trading when it feels such an investment strategy is beneficial to a holder of a separately managed account.
Advisors Asset Management Fees
The firm’s advisory fees are based on each client’s percentage of AUM. But the fees vary for different funds and account types. In addition, the firm retains discretion to negotiate fees and services, and existing clients may encounter lower or higher fees than new clients. For portfolio management services to separately managed accounts, clients may encounter fees for fixed income strategies that range from 0.25% to 2.50%. The fees for equity strategies range from 0.45% to 2.50%. However, Advisors Asset Management acknowledges that some accounts may have fees that fall outside of that range. For sub-advisory services, the firm may charge a fee of 0.25% to 0.70% of assets sub-advised.
Advisors Asset Management may also provide management for non-discretionary accounts for clients such as investment advisors, financial services firms, broker-dealers or banks. The fees for such services are negotiated between the firm and the client. For wrap fee programs, clients may pay a monthly or quarterly fee of up to 0.60% of assets managed by the firm. The firm also charges fees for supervisory and evaluation services for UITs. It’s also important to note that, in addition to advisory fees, end-investors may also be responsible for brokerage, transaction and custodian fees associated with their accounts. The fees for mutual funds and ETFs are specified below.
|Fund Name||Advisory Fee|
|AAM/Bahl & Gaynor Income Growth Fund||0.65%|
|AAM/HIMCO Short Duration Fund||0.38%|
|AAM/HIMCO Global Enhanced Dividend Fund||0.90%|
|AAM/Insight Select Income Fund||0.38%|
|AAM/Phocas Real Estate Fund||0.65%|
The firm calculates the annual advisory fee for each fund as a percentage of the fund’s average daily net assets.
|Exchange Traded Funds||Unified Management Fee|
|AAM S&P 500 High Dividend Value ETF||0.29%|
|AAM S&P Developed Markets High Dividend Value ETF||0.39%|
|AAM S&P Emerging Markets High Dividend Value ETF||0.49%|
|AAM Low Duration Preferred and Income Securities ETF||0.45%|
Each of the funds pays the firm a unified management fee which is calculated daily and paid monthly at an annual rate. The firm bases the rate on the fund’s average daily net assets.
|*Estimated investment management fees do not include brokerage, custodial, third-party manager or other fees, which can vary in amount. Fee amounts are based on fee percentage range for equity strategies.|
|Estimated Investment Management Fees at Advisors Asset Management*|
|Your Assets||Advisors Asset Management Fee Amount|
|$500K||$2,250 - $12,500|
|$1MM||$4,500 - $25,000|
|$5MM||$22,500 - $125,000|
|$10MM||$45,000 - $250,000|
Advisors Asset Management Awards and Recognition
On March 7, 2019, Advisors Asset Management received the “U.S. Deal of the Year” award for being an industry leader in structured products. The recognition comes from mtn-i, a London-based company and global provider of structured notes, MTNs, private placements and private debt market coverage.
Though the firm has now received the award for three consecutive years, its most recent one resulted from a partnership with J.P. Morgan to create USD11.3m Stock-Linked Bear Note, which is due in 2021.
What to Watch Out For
The Colony Group does have two disclosures, according to its most recent Form ADV. In its most recent violation in 2015, the firm consented to the allegation that it failed to accurately report information related to purchase and sales transactions in municipal securities. The firm was censured and fined $10,000.
The terms and conditions for Advisors Asset Management are generally straightforward, but it’s also important to note that most fees may be negotiated, depending on fund or account type, as well as client type. Firm principals and employees may also buy or sell securities identical to those recommended for clients. However, the firm has a fiduciary duty to clients which means it must place their interests before its own.
Opening an Account With Advisors Asset Management
If you’re interested in opening an account, you’ll have a few options for getting in touch. On its website, the firm offers a contact information form that connects clients with firm representatives. You can also call the firm at any of its locations to set up an appointment, or you can stop by one of the firm’s physical locations.
Investing Tips for Beginners
- If you’re new to investing, it’s important to first identify your risk tolerance, as well as your investment objectives, before structuring your portfolio. You’ll then be able to incorporate asset allocation and portfolio diversification to help you meet your financial goals. Not sure where to begin? SmartAsset’s investment calculator can show you exactly how much your investments may generate over time.
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All information was accurate as of the writing of this article.