D.A. Davidson & Co.
Headquartered in Great Falls, Montana, D.A. Davidson & Co. is a registered broker-dealer and investment advisor that traces its roots back to 1935. Over the years, it has expanded by acquiring and merging with other companies, most recently with Wells Nelson & Associates in 2019.
Today, the firm manages nearly $24 billion in assets and employs hundreds of advisors operating out of dozens of branches across the country. D.A. Davidson's financial advisors specialize in working with plan sponsors of qualified retirement plans and providing individuals with financial planning services and portfolio management programs.
D.A. Davidson & Co. Background
D.A. Davidson & Co. has been in business since 1935. Today, it’s part of a group of companies that include the following divisions:
- D.A. Davidson & Co.
- Wealth Management
- Equity Capital Markets
- Investment Banking
- Fixed Income Capital Markets
- Davidson Investment Advisors
- D.A. Davidson Trust Company
Lawrence Martinez serves as chief executive officer of D.A. Davidson Companies, having first joined the firm in 2002. Meanwhile, Michael Purpura is the president and head of wealth management at D.A. Davidson & Co. He joined the firm in 1996 and represents the second generation of Purpuras to serve in leadership roles with D.A. Davidson Companies.
D.A. Davidson & Co. Client Types and Minimum Account Sizes
The firm serves both non-high-net worth and high-net-worth individuals, as well as pooled investment vehicles, pension and profit-sharing plans, charitable organizations, government entities and corporations.
The company does not impose account minimums for financial planning and ERISA Retirement Plan services. For its different portfolio management programs, the minimums are typically:
- Managed Funds Portfolios (MFP) - $5,000
- Russell Model Strategies (RMS) - $25,000
- Separate Account Management (SAM) - $100,000
- Separate Account Management (SAM) using Third-Party Models - $25,000
- Managed Account Consulting (MAC) - $100,000
- Unified Managed Account (UMA) Discretion - $10,000
- Unified Managed Account (UMA) Select - $100,000
- Paragon - $10,000
- Paragon CWAM - $10,000
- Choice - $24,000
Services Offered by D.A. Davidson & Co.
Advisors with D.A. Davidson & Co. deliver services through three different main divisions. Read on for more information about each one.
The firm offers financial planning services through the Wealth Management arm. Members of this group work with individual clients in order to construct and monitor financial plans tailored to their goals. Depending on your needs, your financial plan may cover various topics including:
- Estate planning
- Saving for retirement
- Cash flow analysis and personal savings
- Insurance needs
The firm’s advisors develop individual financial plans to meet all objectives within 90 days. If these goals are not achieved, the client can work with an advisor to develop a new plan.
All financial advisors who create financial plans are also brokers with Series 65 or 66 licenses. Many are also certified financial planners (CFPs).
Retirement Plan Services
D.A. Davidson & Co. works with pension and qualified profit-sharing plans through its ERISA Employer Plan Services division. The firm offers advice in line with the plan’s investment policy and investment selections. It also works with the plan’s fiduciaries to find vendors and monitor the continued suitability of investment options in the plan. However, the firm’s services are restricted to advice and limited consulting. It does not include:
- Selection of other service providers
- Handling of brokerage activities
- Selection of brokers to effect transactions
Wrap-Fee Investment Advisory Program
D.A. Davidson & Co. also provides individuals with portfolio management advice through various wrap-fee programs. They include:
Managed Funds Portfolio (MFP) - Utilizes proprietary strategic asset allocation models developed by D.A. Davidson and third-party investment management models by Davidson Investment Advisors (a related firm). These models offer exposure to various asset classes, including equities, fixed income and alternative investments. Portfolios adhere to different investment styles like core, growth and value and invest in exchange-traded funds (ETFs) or exchange-traded notes (ETN).
Russell Model Strategies (RMS) - Utilize asset allocation models developed by Russell Investments. These may offer exposure to different asset classes like equites, fixed income and real assets. They invest mainly in mutual funds of the Russell Funds family. Each model has a different objective.
Separate Account Management (SAM) - Involves selected third-party or affiliated investment managers. An advisor works with the client to choose a strategy that the advisor deems appropriate to the client.
Managed Account Consulting (MAC) - Clients enter dual contracts with D.A. Davidson & Co. and a third-party investment advisor. D.A. Davidson does not have discretion to make investment decisions. Instead, the outside manager provides investment management services for the client in accordance with the advisory agreement.
Unified Managed Account (UMA) - An account that consists of multiple model portfolios provided by third-party subadvisors. They may invest in ETFs, mutual funds and ETNs.
Paragon - D.A. Davidson and an advisor with the Paragon Program work with the client to devise an investment strategy that adheres to the client’s risk tolerance, financial goals and other financial profile factors. The Paragon manager makes all investment decisions.
Paragon CWAM - A select group of D.A. Davidson advisors can invest client assets in specific model portfolios and asset allocations developed by advisors that were once associated with Crowell Weedon & Co.
Choice - The firm's choice program allows clients to receive an individualized investment strategy and asset allocation, but retain full control over transaction decisions.
D.A. Davidson & Co. Investment Philosophy
In terms of its ERISA plan services, D.A. Davidson & Co.’s philosophy extends only to the advice it provides in accordance with the plan’s established investment policy statement.
When providing portfolio management advice through one of its many wrap fee programs, the firm aims to employ strategies that reflect the financial profile and objectives of the client. The firm would consider various factors such as risk profile, financial assets, resources available and more.
Fees Under D.A. Davidson & Co.
Based on a percentage of assets under management (AUM) in the plan at the end of each quarter, fees charged to clients in the ERISA Plan Services program depend on the scope of the services provided and negotiated with the plan sponsor. D.A. Davidson & Co. notes that to "the extent we provide fiduciary services and receive any indirect compensation by the sponsors of the investments in a plan or self-directed participant account, we will offset the amount against our fee.”
Financial planning fees charged to individual clients depend on the nature of the services rendered, although they generally range from $1,500 to $15,000.
Annual fees for the firm’s portfolio management programs are also typically charged as percentages of AUM. Fees for the firm's wrap fee programs are negotiable up to 1.85% of AUM. For the SAM Model, SAM Manager, UMA, RMS and Paragon CWAM programs, there is an additional fee to compensate the third-party investment manager or managers involved in those programs. This additional fee typically ranges from 0.02% to 0.75% annually.
What to Watch Out For
D.A. Davidson & Co. reported 15 regulatory actions in its most recent filings with the Securities and Exchange Commission. You can read more about the firm's regulatory disclosures by opening the SEC-filed Form ADV for D.A. Davidson & Co.
Also worth noting: Advisors at D.A. Davidson & Co. are also brokers and many are insurance agents. These non-advisor roles can potentially present conflicts of interest. Similarly, the large firm's many affiliations pose conflicts of interest. That said, the firm states that all financial planners are fiduciaries who must always work in the best interests of the client.
Tips for Finding the Right Financial Advisor
- Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
- Be sure to ask advisors the right questions. For example, you should know if advisors act as fiduciaries all the time. When an advisor is also a broker-dealer representative or insurance agent, this isn't always the case.
All information was accurate as of the writing of this article.