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AE Wealth Management Review

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by Hunter Kuffel Updated
AE Wealth Management

AE Wealth Management is a financial advisor firm headquartered in Topeka, Kansas, with just shy of 200 advisors located throughout the country. The firm offers asset management services and financial planning services to more than 13,000 clients. These clients are a mix of individuals, high-net-worth individuals and corporations.

The firm was founded in 2016 by David Bach and David Callanan. It has since grown rapidly, with roughly $2.7 billion in assets under its management as of December 2017.

AE Wealth Management Background

AE Wealth Management was founded by David Callanan and David Bach in February 2016. Callanan is the founder of Advisors Excel, LLC, and Bach is a popular writer and speaker with expertise on investing and personal finance. The firm is young, but it has already grown rapidly, with almost 200 advisors on staff and billions in assets under management.

What Types of Clients Does AE Wealth Management Accept?

AE Wealth Management provides services to 13,123 clients, the vast majority of whom are individuals. The firm also works with high-net-worth individuals and corporations. 

AE Wealth Management Minimum Account Sizes

AE Wealth Management requires that you have at least $10,000 in order to open an account. The firm can make an exception at its discretion, particularly if you anticipate making additional deposits in the near future or a member of your immediate family is also an AE client.

Services Offered by AE Wealth Management

AE Wealth Management offers three broad categories of services to clients: direct asset management services, model portfolio solutions and financial planning services. The direct asset management services are offered on a discretionary basis, which means the firm will be able to buy and sell securities for your account without your specific permission. That said, you will be able to impose restrictions ahead of time if you wish to ensure that your account avoids certain securities or products. 

Model portfolio solutions allows you to review a collection of model portfolios and choose one that you feel aligns most closely with your financial preferences. AE Wealth Management consults with third-party firms to create the collection of model portfolios.

The firm’s financial plans typically address at least one of the following areas:

  • Investment planning
  • Retirement planning
  • Insurance planning
  • Tax planning
  • Education planning
  • Portfolio review
  • Asset allocation

AE Wealth Management Investment Philosophy

AE Wealth Management advisors focus on delivering consistently reliable returns to their clients rather than hunting for home-run style transactions that may bring unnecessary risk. When determining securities to recommend, the firm looks at past performance, potential sensitivity to business cycles and broader macroeconomic factors. 

The firm generally prizes a buy-and-hold approach over active trading, and it also engages in tactical asset allocation and value investing. Tactical asset allocation establishes a range of percentages for each asset class in your portfolio, which allows you some flexibility but also ensures that you’re keeping your portfolio diverse. Value investing involves looking for stocks that you feel have good long-term potential but the market is undervaluing for one reason or another.

Fees Under AE Wealth Management

AE Wealth Management calculates fees for its asset management services based on a percentage of assets under management. The exact rate is negotiable depending on the type of client, the complexity of the account, the client's relationship with the firm and the size of the account. The firm may charge clients as much as 2.90% of assets under management. These fees will be paid monthly in arrears.

For financial planning services, clients will be charged an hourly fee that can range from $0 to $500 per hour based on the complexity of the account. The exact rate will be specified before you enter into a financial planning relationship, so you’ll know what you’re paying from the outset.

What to Watch Out For

Certain advisors at AE Wealth Management are also registered representatives of Madison Avenue Securities, which is a registered securities broker-dealer. While these advisors won’t receive commissions in their capacity as AE Wealth Management advisors, they are permitted to conduct security transactions and receive commissions for those transactions in their capacity as Madison Avenue Securities representatives. This ability creates a potential conflict of interest since advisors may be incentivized to steer clients toward securities that will generate commissions.

Additionally, AE Wealth Management advisors may be licensed as independent insurance agents with Advisors Excel, LLC or Asset Marketing Systems Insurance Services, LLC. This means they could earn commissions by selling insurance products to clients. A conflict of interest also exists here because advisors would have an incentive to recommend insurance products to clients instead of focusing exclusively on the client’s needs.

That said, the firm discloses these conflicts before beginning any relationship with a client, and you are under no obligation to follow recommendations. Furthermore, the firm is bound by fiduciary duty, meaning that it is legally obligated to act in your best interest at all times.

Disclosures

AE Wealth Management has multiple disclosures, meaning that multiple advisory affiliates have either engaged in unethical behavior, or been involved in the violation of investment-related regulations in the last 10 years. These actions include, in the case of AE Wealth Mangement, selling unauthorized annuities, using unapproved or misleading marketing materials, recommending model portfolios without proper registration and, in one case, misappropriating client funds for personal use (this affiliate is no longer with AE Wealth Management).

Opening an Account With AE Wealth Management

If you’re interested in opening an account with AE Wealth Management, the easiest way to get started is to head to the firm’s website and click on “Find an Advisor” on the left sidebar. From there, you can find the AE advisor closest to you and reach out either by phone, email or in person to set up an initial consultation.

Where Is AE Wealth Management Located?

AE Wealth Management advisors are located across the country in 37 different states. The firm’s headquarters are located in Topeka, Kansas at 2950 SW McClure Road.

Tips for Finding a Financial Advisor

  • Using SmartAsset’s financial advisor matching tool can be a great way to take the hassle out of finding a financial advisor. Simply answer a few questions about your financial preferences and goals, and the tool will match you with up to three qualified financial advisors in your area.
  • Before you begin your search, think about why you're looking for a financial advisor. Are you looking for help setting up an IRA or a 529 plan, or are you just looking to dip your toes in the stock market? If it's the latter, you may be better off checking out a robo-advisor. Robo-advisors typically have lower minimums, and they can still help you work toward your goals.

How Many Years $1 Million Lasts in Retirement

SmartAsset's interactive map highlights places where $1 million will last the longest in retirement. Zoom between states and the national map to see the top spots in each region. Also, scroll over any city to learn about cost of living in retirement there.

Least
Most
Rank City Housing Expenses Food Expenses Healthcare Expenses Utilities Expenses Transportation Expenses

Methodology SmartAsset calculated the average cost of living for retirees in the largest U.S. cities. Using that calculation, we determined how many years $1 million would last in retirement in each major city.

First, we looked at data from the Bureau of Labor Statistics (BLS) on the average annual expenditures of seniors throughout the country. We then applied cost of living data from the Council for Community and Economic Research to adjust those national average spending levels based on the costs of each expense category (housing, food, healthcare, utilities, transportation and other) in each city.

We assumed the $1 million would grow at a real return (interest minus inflation) of 2%, reflecting the typical return on a conservative investment portfolio. Finally, we divided $1 million by the sum of each of those annual numbers to determine how long $1 million would last in each of the cities in our study.

Sources: Bureau of Labor Statistics (BLS), Council for Community and Economic Research