Houston-based Avalon Investment & Advisory is a large financial advisor firm that currently places as SmartAsset's top financial advisor firm in Houston and the top firm in Texas. In 2019, the firm was also recognized by the Financial Times as one of the 300 Top Registered Investment Advisers in the U.S.
A fee-based firm, Avalon Investment & Advisory allows certain licensed advisors to receive commissions for overseeing securities transactions. This represents a potential conflict of interest, as advisors would be incentivized to recommend such transactions. By contrast, a fee-only firm earns compensation solely from client fees, thereby avoiding such conflicts of interest.
Avalon Investment & Advisory Background
Avalon Investment & Advisory opened for business in Houston in 2001, with its San Antonio branch coming into existence in 2014. The firm is owned by a combination of in-house employees and The Cynosure Group, a firm located in Utah that works with family offices. No single individual or entity owns more than 25% of the firm's shares, though.
Avalon Investment & Advisory employs 48 advisors between its two offices. Among these are two certified financial planners (CFPs), seven chartered financial analysts (CFAs) and one certified public accountant (CPA).
Avalon Investment & Advisory Client Types and Minimum Account Sizes
Avalon Investment & Advisory has almost 1,900 clients, and most of them are high-net-worth individuals. The firm also works with non-high-net-worth individuals, pooled investment vehicles, pensions and other retirement plans, trusts, corporations, insurance companies, investment advisors and charitable organizations.
Avalon Investment & Advisory prefers to work with clients that have at least $5 million in investable assets for most strategies but it may be higher for others, up to $10 million. However, this isn’t a hard-and-fast requirement, so those who have less than that may still be accepted as client.
Additionally, the firm imposes minimums for the private funds it advises. These requirements range from $200,000 to $500,000.
Services Offered by Avalon Investment & Advisory
Avalon Investment & Advisory provides investment management services on both a discretionary and non-discretionary basis. It also provides family office services, asset allocation planning and more. Avalon describes family office services as including tasks like:
- Formulating an investment policy statement (IPS) and financial goals
- Performing financial accounting and recordkeeping
- Providing rebalancing advice and coordinating with other professionals, such as attorneys or accountants
The firm also acts as an advisor to four private funds. A division of the firm called Matterhorn Capital Management also provides model portfolios to a number of financial intermediaries.
Avalon Investment & Advisory Investing Philosophy
Avalon Investment & Advisory utilizes a collection of 40 distinct investment strategies to construct client portfolios. When putting together a portfolio, advisors consider factors like the client’s investing goals, risk tolerance and time horizon to determine the most appropriate mix of strategies. About 10 of these strategies focus on investing in fixed-income securities, while the other 30 focus on equity investments.
In general, this firm takes a long-term approach to managing client assets. In other words, when the firm invests your money in securities, it plans to hold on to them for long periods of time. This is done to avoid portfolio volatility and high trading fees.
Fees Under Avalon Investment & Advisory
In most cases, Avalon Investment & Advisory works with clients who have at least $5 million in investable assets. For these clients, the following fee schedule will apply:
| Avalon Investment & Advisory Fees | |
| Asset Value | Fee Percentage |
| First $25MM | 0.70% |
| Next $25MM | 0.60% |
| Next $25MM | 0.40% |
| Above $100MM | 0.30% |
For clients with less than $5 million in AUM, a minimum annual fee of $50,000 will apply. For family office services, the firm will typically negotiate a fee that depends on the specifics of the client and the services rendered.
Below is a table that shows how much you'd pay as a client of Avalon if your portfolio contained at least $5 million in investable assets. For context, a recent study by RIA in a Box shows the average annual advisory fee is about 0.95% of AUM.
| *Estimated investment management fees do not include brokerage, custodial, third-party manager or other fees, which can vary in amount. | |
| Estimated Investment Management Fees at Avalon Investment & Advisory* | |
| Your Assets | Avalon Investment & Advisory Fee Amount |
| $5MM | $35,000 |
| $10MM | $70,000 |
| $25MM | $175,000 |
| $50MM | $325,000 |
What to Watch Out For
Avalon Investment & Advisory has no disclosures listed on its SEC-filed Form ADV, which gives it a clean legal and regulatory record.
Avalon is a fee-based firm, meaning some members of its advisory staff can earn commissions for overseeing certain securities transactions as representatives of a broker-dealer. While this represents a potential conflict of interest, the firm is still bound by fiduciary duty. As a result, all of its advisors are required by law to always act in the best interests of clients.
Opening an Account With Avalon Investment & Advisory
There are a few different ways to become a client of Avalon Investment & Advisory. You can call the firm’s Houston headquarters or its San Antonio office, or you can simply stop by the firm yourself. The Houston office is on the corner of Waugh Drive and Allen Parkway, west of downtown. The San Antonio location can be found on Mulberry Avenue.
All information is accurate as of the writing of this article.
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