Dempsey Lord Smith Review

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Dempsey Lord Smith - also known as DLS - is a financial advisor firm with millions of assets under management (AUM). Dempsey Lord Smith's home office is located in Rome, Georgia. This fee-based firm offers services such as financial planning and portfolio managment. 

Dempsey Lord Smith Background

Dempsey Lord Smith began conducting business in 2007. The firm is owned by Jerry Eskel Dempsey Jr. (CEO), who owns 28%, and three others, each of whom have a 24% ownership stake: John Hayward Lord (CCO), Ernest Liddell Smith (VP, sales & marketing) and Duvan Ledbetter Brock (VP, recruiting & sales).

Dempsey Lord Smith Client Types and Minimum Account Sizes

Dempsey Lord Smith advises the following types of clients:

• Individuals
• High-net-worth individuals
• Pension and profit-sharing plans
• Charitable organizations
• Other corporations or businesses
• State or municipal government entities

DLS requires new clients to have a minimum account size of $10,000 to receive portfolio management or other services (excluding financial planning services). Beyond this initial requirement, account minimums vary depending on the type of services a client wants.

Services Offered by Dempsey Lord Smith

With regard to its model portfolio management program, Dempsey Lord Smith provides portfolio management services on both a discretionary and non-discretionary basis. The firm's different portfolio management services are as follows:

• Growth & Income Portfolio - uses different types of securities and seeks to grow the principal value of the investment porfolio and generate income with a moderate risk profile.
• Income Portfolio - uses different types of securities and seeks to generate income with a moderate risk profile. Uses mutual funds, 
• ETF/Mutual Fund Portfolio - uses mutual funds and ETFs, and seeks to grow the principal value of the investment portfolio and generate income with a moderate risk profile.

DLS also offers several options under its Managed Account Solutions Program:

• Separately Managed Account - available through the firm's relationship with Envestnet. Designed to provide clients the ability to tailor an investment portfolio to their specific financial needs. Minimum account value is $100,000
• Multi-Manager Account - available through Envestnet. One or more subadvisors are selected to manage client assets on a discretionary basis. Delivers benefits of a traditional separately managed account in a single diversified portfolio. Minimum account value is $50,000
• Wrap Strategists Mutual Fund & ETF Wrap Portfolio - independent professional third-party money managers (i.e. "strategists") provide models of mutual funds and/or ETFs. Offers client professional money management, performance reporting and related service and support. Minimum investment is typically $5,000 or more (depending on which strategist is selected).
• Advisor Directed Unified Managed Account - available through the firm's relationship with Envestnet. Allows clients access to multiple investment strategies through the use of Separate Account Managers, mutual funds and/or ETFs in order to facilitate diversification of the account. Minimum account value is $50,000.
• PMC "SIGMA" and Select Mutual Fund Solution Program - mutual fund wrap program consisting of portfolios sub-managed by Strategic Advisers, Inc. (a wholly owned subsidiary of Fidelity Investments). Minimum investment is $50,000.
• Strategic Advisor Portfolios Program (SAP) - mutual fund wrap program consisting of portfolios sub-managed by Strategic Advisers, inc. a wholly-owned subsidiary of Fidelity Investment. Minimum Investment is $50,000.

As part of its wealth management platform, DLS offers a wrap fee program. Assets in this program may be invested (on a discretionary or non-discretionary basis) in a wide variety of securities, including mutual funds, equities, bonds, ETFs and other security types. The minimum investment in this program is $10,000.

In terms of financial planning and consulting, Dempsey Lord Smith offers services including but not limited to investment selection/asset allocation, portfolio reviews, periodic client consultations, retirement planning, estate planning, education planning, cash flow/budget/income analysis, business retirement planning, employee benefits analysis, business succession planning and/or insurance planning and analysis. 

Furthermore, the firm offers various pension consulting services, as well as an advisor referral program through which clients can obtain professional portfolio management services through a third-party asset manager. 

Dempsey Lord Smith Investment Philosophy

The various sources and tools this firm uses for analyzing securities and providing advice include print media (newspapers, journals and magazines), third-party research, corporate rating services, annual reports, company press releases, filings with the SEC, sales literature of product sponsors and information generally available online. Other tools include software or web-based programs for security analysis.

The firm may use one or more of the following methods to analyze and put together management advice: fundamental, technical, qualitative or a combination of analysis methods.

When it comes to third-party asset managers, the firm will also examine the experience, expertise, investment philosophies and past performance of these managers to determine whether they have demonstrated an ability to invest over a period of time and in various economic environments.

Furthermore, DLS uses a variety of investment strategies to tailor portfolios to meet client needs. While there is no uniform strategy, common investment strategies include: 

• An asset allocation program utilizing mutual funds and/or ETFs
• Investing in financially strong, undervalued stocks of companies
• Tailoring a portfolio for growth and income
• Tailoring a portfolio for income

Fees Under Dempsey Lord Smith

The fees that Dempsey Lord Smith charges clients are detailed below.

Portfolio Management and Model Portfolio Management Program

Fees are negotiable between DLS and the client. The specific annual fee is identified in the contract between the two. For all amounts of AUM, the maximum annual fee is 2.50% (2.00% in Alabama).

Fees are paid monthly or quarterly in advance or in arrears. These fees do not include brokerage, custodial, third-party manager or other fees, which can vary in amount.

Wealth Management Platform - Managed Account Solutions Program and DLS Wrap Fee Program

Fees are negotiable between DLS and the client. The specific annual fee is identified in the contract between the two. For all amounts of AUM, the maximum annual fee is 2.50% (2.00% in Alabama).

In a wrap fee arrangement, clients pay a single fee for advisory, brokerage and custodial services.

For the DLS Wrap Fee Program, fees are paid monthly or quarterly in advance or in arrears.

Financial Planning & Consulting Services

Financial planning and consulting may be billed in one of two ways: on an hourly basis ranging from $50 to $300 or more, or a fixed fee basis ranging from $250 to $25,000. Fees are negotiable.

Advisor Referral Program

Clients are assessed annual fees according to the fees established by the third-party asset manager, unless otherwise negotiated. Clients may be responsible for additional fees including administrative and management charges, broker-dealer custodial charges and commission charges.

Learn more about advisors' typical costs here.

What to Watch Out For

Dempsey Lord Smith has five disclosures of regulatory actions on its latest Form ADV filed with the U.S. Securities & Exchange Commission (SEC). Two of the disclosures solely involved the firm itself, while two involved affiliated advisors. One disclosure from 2015, which involved both the firm and an affiliate, resulted in a censure from the Financial Industry Regulatory Authority (FINRA) and a $10,000 fine. FINRA alleged Dempsey Lord Smith failed to set up escrow accounts in connection to three private placement contigent offerings, "even though the firm participated in each of the offerings and accepted customer funds."

It's also important to note that advisors at Dempsey Lord Smith, a fee-based firm, may also be broker-dealers. Employees acting in these non-advisor roles generally receive transaction-based fees, which can be a potential conflict of interest. That said, as an SEC-registered investment advisor, the firm is legally obligated to uphold its fiduciary duty and work in clients’ best interests at all times.

Opening an Account With Dempsey Lord Smith

To open an account with Dempsey Lord Smith, you can visit the firm's website or call (706) 238-9575.

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

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