American Portfolios Advisors, Inc. (APA) is a large financial advisor serving not only clients but advisors and their clients as well. The firm is based in Holbrook, New York. The firm provides several different types of investment management and financial planning services to a wide range of clients, most of whom are individuals. However, these services are offered indirectly by the firm, as it works with a number of affiliated investment advisor representatives. Although these representatives provide APA services, the firm allows them to continue using the name of their individual firm.
APA is a fee-based firm. This means that, in addition to any advisory fees received from clients, some representatives can also garner commissions from selling financial products to clients. This is very different from a fee-only firm, which only earns advisory fees from clients.
American Portfolios Advisors Background
American Portfolios Advisors was founded in 2001. The current owner of the firm is American Portfolios Holdings, Inc. (APH). In turn, APH is principally owned by Lon Dolber, the firm's CEO and president. Dolber has over 20 years of experience in financial services.
APA employs a large team of financial advisors, many of whom hold financial certifications and designations, such as certified financial planners (CFPs). The firm manages assets on both a discretionary and non-discretionary basis.
American Portfolios Advisors Client Types and Minimum Account Sizes
Through its advisory representatives, APA primarily works with non-high-net-worth individuals and families. It also manages assets for high-net-worth individuals, pension and profit-sharing plans, charities and businesses.
The minimum account size requirements at APA may vary depending on the type of account you have. However, it lists a single minimum of $10,000 for Advisor's Choice accounts. The firm can choose to waive or lower this requirement, though.
Services Offered by American Portfolios Advisors
APA offers a wide range of investment management and financial planning services. The firm's principal offerings are its three Advisor's Choice programs. Each of these work similarly, as they all focus on mutual funds, stocks, bonds, exchange-traded funds (ETFs), call options and alternative investments. The only differences lie in their fee structures.
- Advisor's Choice 1: Clients pay fees for custodial, asset allocation, portfolio monitoring and reporting services
- Advisor's Choice 2: Clients pay fees for brokerage, asset allocation, portfolio monitoring and reporting services
- Advisor's Choice 3: Clients pay AUM-based fees
The firm also has three Advisor's Solutions programs available to clients. In the Strategist Portfolios program and the APA-Sponsored Portfolios programs, the firm performs due diligence on third-party advisors that help with asset allocation and other strategic decisions. The third program is the Nine Points Investment Management (NPIM) program, which adheres to the following tenets:
- Uncompromised advice
- Performance management
- Measurable risk
- Predictable costs
Financial planning and consulting services are provided by APA using financial planning software. Ultimately, they are designed to help individuals and businesses manage their financial resources intelligently and responsibly. These include:
- Investment planning
- Financial planning
- Asset allocation
- Estate planning
- Benefits planning
- Retirement planning
American Portfolios Advisors Investment Philosophy
APA's advisory representatives tailor the firm's investment philosophies and strategies to the individual needs of clients. Through a series of interviews and consultations, advisors take note of the goals of each client, particularly in areas like time horizon, liquidity needs, risk tolerance, investment history, preferred strategy and more. Depending on the specific service requested by the client, advisors may invest assets in a wide variety of securities.
Advisors use both qualitative and quantitative analysis to properly evaluate investments for clients. They tend to utilize a variety of information sources to inform their decisions, such as research materials prepared by outside sources, financial publications, annual reports, prospectuses, U.S. Securities and Exchange Commission (SEC) filings and press releases. The firm typically engages in both long- and short-term purchases, as well as trading and covered call option writing. While the firm doesn't avoid frequent trading, this strategy is not commonly used.
American Portfolios Advisors Fees
Fees for accounts at APA vary depending on what services the client needs. The Advisor's Choice programs all charge a maximum annual fee of 3% of the client's AUM, as these fees are negotiable on a case-by-case basis. Administrative fees for Advisor's Choice 1 and 2 are typically charged according to the following schedule:
|Advisor's Choice 1 and 2 Administrative Fees
|Up to $25,000
|$25,000 - $100,000
|$100,000 - $500,000
|$500,000 - $1,000,000
When it comes to the Advisor's Solutions programs, fee rates are defined a bit more clearly. For starters, fees are typically calculated and charged on either a quarterly or monthly basis.
|Advisor's Solutions Program Fees
|Annual Fee Range
|APA-Sponsored Strategist Portfolios Program
|0.35% - 3.00%
|Nine Points Investment Management
|0.35% - 3.00%
Financial planning fees are entirely negotiable and may be based on a client's AUM or charged at a flat or hourly rate.
What to Watch Out For
American Portfolios Advisors has a single disclosure listed on its Form ADV. This is in reference to a violation from 2018 in which the firm had to pay a $250,000 fine, plus disgorgement after it was found to have not disclosed a conflict of interest that arose due to its share class selection process.
APA is a fee-based firm, which means certain advisory representatives can earn commissions from the sale of insurance products or securities to clients. A potential conflict of interest may arise from the arrangement, as advisors have an incentive to recommend products for which they may receive a commission. Despite each of these potential conflicts of interest, the firm and its advisors are legally obligated by a fiduciary duty to act in its clients' best interests at all times.
Opening an Account With American Portfolios Advisors
To inquire about working with one of APA's advisory representatives, you'll need to go to its website and submit a contact form. You can also call the firm over the phone at (631) 870-8207.
All information is accurate as of the writing of this article.
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