Brown Advisory is a registered investment advisor (RIA) headquartered in Baltimore that has been providing active investment management services since 1993.
The firm works primarily with high-net-worth and non-high-net-worth individuals, and also offers services to other investment companies and advisors, pooled investment vehicles, pension and profit sharing plans, charitable organizations, state and municipal governments, insurance and corporations.
Brown specializes in actively managed equity, fixed income and balanced investment portfolios. But it can also offer investment-related financial planning services.
Brown Advisory Background
The firm was formed in 1993 as the investment management branch of Alex Brown & Sons, a Baltimore-based investment bank founded in 1800. In 1998, Brown Advisory became independently owned via an employee-led buyout.
Today, it’s a wholly owned subsidiary of Brown Advisory Management, LLC (BAM). The managing member of BAM and Brown Adsvisory’s controlling entity is Brown Advisory Incorporated (BAI), which is organized as a Maryland C corporation.
With more than 100 investment advisors, Brown Advisory is led by CEO and President Michael D. Hankin. He’s been in the financial services industry since the 1970s. Additionally, Hankin serves as trustee and vice chair of Johns Hopkins Medicine and chair of the board of managers of the Johns Hopkins University Applied Physics Lab.
Brown Advsory’s mission is to provide strategic advice in order to achieve first-rate investment performance.
Brown Advisory Client Types and Minimum Account Sizes
Brown Advisory works with a diverse pool of clients. According to documents it recently filed with the SEC, the firm can help the following types of clients:
- High-net-worth individuals and families
- Pooled vehicles, including registered investment companies, UCITS and private funds
- Charitable organizations
- Public/government-related clients
- Pension and profit-sharing plans
- Insurance companies
- Individual retirement plans (IRA)
- Charitable institutions
- Religious institutions
- Other taxable individual accounts
Although Brown Advisory generally requires a minimum investment of $5 million, it may waive this requirement at its discretion. The decision would depend on the client relationship, client service requirements and other circumstances.
Services Offered by Brown Advisory
Brown Advisory specializes in providing investment portfolio management services. It does this by applying active equity, active fixed income and balanced portfolio investment strategies to different model portfolios.
The firm typically offers investment management services on a discretionary basis. This means the firm has the authorization to buy and sell securities within your account as it deems fit based on your individual situation. However, clients may place reasonable restrictions on certain securities by contacting the firm.
Brown Advisory also offers financial planning under its strategic advisory services wing. Depending on your needs, the firm may advise on the following investment-related financial topics:
- Tax planning
- Trust management
- Estate planning
- Philanthropic inititiaitves
- Family business advice
In addition, the firm’s advisors work with clients’ accountants, lawyers and other professionals in order to create a comprehensive wealth management plan. Brown Advisory offers its strategic advisory services to its clients free of charge.
Brown Advisory Investment Philosophy
By actively selecting securities for investment, Brown Advisory offers equity investment strategies designed to seek long-term capital appreciation. Unlike some firms, Brown Advisory doesn’t aim to track the performance of an equity index of securities. Instead, it attempts to outperform it in the long term by using its own expertise and research.
This is generally what differentiates active investing from passive investing.
Brown Advisory applies this method to its fixed-income strategies, which mainly seek bonds with capital appreciation potential that is not related to the general movement of interest rates. The firm’s balanced strategies combine the objectives of its equity and fixed-income strategies.
Fees Under Brown Advisory
Clients of Brown Advisory typically pay annual fees for portfolio management services based on a percentage of their account balances. We lay out the firm’s current fee schedule for annual asset-based fees below:
|The First $5 million under management||1%|
|The Next $5 million under management||0.75%|
|The next $15 million under management||0.5%|
|The next $75 million under management||0.35%|
|Amounts more than $100 million under management||0.3%|
In cases where Brown Advisory waives the minimum investment requirement, the following fee schedule applies:
|The first $3 million under management||1.25%|
|The next $2 million under management||1%|
Brown Advisory presents its fee schedule based on an annual rate. But keep in mind that the firm collects fees on a quarterly basis, so your fees would be charged as one-fourth of the applicable annual fee.
Also, these asset-based fees don’t include other expenses associated with the management of your account. These may include fees charged by the client’s custodian and fees related to the management of underlying funds that client portfolios invest in. While these fees aren’t paid to Brown Advisory, they’ll reduce your account size accordingly. Still, this structure is nearly universal in the investment management industry.
Check out the table below to see how Brown Advisory’s fees for its management services compared to those at similar financial advisor firms. Note that these fees are only estimates and actual costs may vary.
|Your Assets||Fees for brown Advisory Clients|
*Fee estimates only consider the maximum base fees for the services each firm provides. You may also pay manager fees and other fees, which can vary in amount. **All figures are based on median fee levels according to Bob Veres' 2017 Planning Profession Fee Survey. The above estimates solely take into account AUM-only fees. Total costs will likely be higher due to additional expenses.
What to Watch Out For
Brown Advisory reported no legal or disciplinary events in its most recent SEC filings.
One thing worth noting: Advisors at Brown Advisory may be affiliated with other related or unrelated firms in the financial services industry. Also, they may be registered representatives of a broker-dealer. These relationships may present potential conflicts of interest.That said, Brown Advisory is legally required to uphold its fiduciary duty and always work in the best interests of the client. Should any potential conflict of interest arise, the firm must disclose this situation to its clients.
Opening an Account With Brown Advisory
The easiest way to open an account with Brown Advisory is by calling its main line at (410) 537-5400. Or you can visit its official website at https://www.brownadvisory.com/ and click on the “Contact us” tab to send Brown Advisory a secure a message.
All information is accurate as of the writing of this article.
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