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American Portfolios Advisors Review

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American Portfolios Advisors Review

American Portfolios Advisors, Inc.

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. APA and its advisors have around $8.2 billion in assets under management (AUM).

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 team of 55 financial advisors, many of whom hold financial certifications and designations, such as certified financial planner (CFP). 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, who make up over 85% of the firm's total client base. It also manages assets for high-net-worth individuals, pension and profit-sharing plans, charities and businesses.

The minimum account size requirements at APA vary depending on the type of account you have. For non-qualified Advisor's Choice accounts, the minimum is $10,000. Qualified Advisor's Choice accounts have a minimum of $5,000. The firm can choose to waive or lower these requirements, 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
  • Alignment
  • Performance management
  • Measurable risk
  • Transparency
  • Consistency
  • Efficiencies
  • Accessibility
  • 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
Total AUM Annual Fee
Up to $25K 0.25%
$25K - $100K 0.20%
$100K - $500K 0.12%
$500K - $1MM 0.10%
Above $1MM 0.05%

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
Program Annual Fee Range
Strategist Portfolios Program 0% - 1.00%
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.

*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 Advisor's Choice 1 and 2 maximum 3% annual rate.
Estimated Investment Management Fees at American Portfolios Advisors*
Your Assets American Portfolios Advisors Fee Amount
$500K Up to $15,000
$1MM Up to $30,000
$5MM Up to $150,000
$10MM Up to $300,000

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. It's also worth noting that certain qualified client accounts may be charged performance-based fees, an arrangement that may also induce a conflict of interest. 

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, or call the firm at (631) 870-8207.

Tips for Financial Planning

  • Working with a financial advisor to build a financial plan can make a big difference in your future. Finding the right financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with financial advisors in your area in 5 minutes. If you’re ready to be matched with local advisors, get started now.
  • Curious how much your investments will grow over time? SmartAsset’s investment calculator can give you a sense for what kind of growth you can expect.

All information is accurate as of the writing of this article. 

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 the cost of living in retirement for that location.

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

Methodology To determine how long a $1 million nest egg would cover retirement costs in cities across America, we analyzed data on average expenditures for seniors, cost of living and investment returns.

First, we looked at data from the Bureau of Labor Statistics (BLS) on the average annual expenditures of seniors. 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. Using this data, SmartAsset calculated the average cost of living for retirees in the largest U.S. cities.

We assumed the $1 million would grow at a real return (interest minus inflation) of 2%. This reflects the typical return on a conservative investment portfolio. Then, we divided $1 million by the sum of each of those annual numbers to determine how long $1 million would cover retirement expenses in each of the cities in our study. Cities where $1 million lasted the longest ranked the highest in the study.

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