ESI Financial Advisors Review

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ESI Financial Advisors provides clients with access to various investment advisory programs, many of which involve the services of other large firms like Vangaurd and Fidelity Investments. It also offers financial planning services through its network of independent advisor representatives (IARs).

Today, the financial advisory firm manages more than $1.29 billion in assets. 

ESI Financial Advisors Background

ESI Financial Advisors also operates under the name Equity Services, Inc. It was formed in 1968 as an affiliate of the National Life Insurance Company. NLV Financial Corporation is the sole shareholder of Equity Services, Inc. and the National Life Group companies. ESI Financial Advisors became a registered investment advisor (RIA) in 1992. 

ESI Financial Advisors Client Types and Minimum Account Sizes

ESI Financial Advisors works with individuals, corporations, trusts, estates, charitable organizations and retirement plans, such as pension and profit-sharing plans.

For asset management programs, the firm imposes minimum account sizes ranging from $10,000 to $250,000.

Services Offered by ESI Financial Advisors

ESI Financial Advisors delivers investment advisory services through the following programs and sub-programs: 

ESI Illuminations 

ESI Financial Advisors provides acceess to Envestnet's asset management platform, which features these programs:

• Third-Party Strategist - ESI Financial Advisors selects different investment management firms to provide actively managed portfolios generally built with mutual funds and exchange-traded funds (ETFs). These managers may include 3D Asset Management, BlackRock, Brinker Capital, Capital Group (American Funds), Clark Capital, CLS, Fidelity, Fort Washington Advisors, Good Harbor, Morningstar Investment Services, Russell Investments, Symmetry, Vanguard and W.E. Donoghue & Co. 
• Advisor as Portfolio Manager - an advisor representative of ESI Financial Advisors designs a portfolio with mutual funds and ETFs using technology from Envestnet. 
• Unified Managed Accounts (UMA) - IARs with ESI Financial Advisors work with Envestnet to create an UMA that can hold multiple strategies within one brokerage account. 

ESI Directions

The advisor utilizes technology from Envestnet to design an asset allocation that adheres to the client’s risk tolerance and other factors. This portfolio may invest in stocks, bonds, mutual funds, options, ETFs, UITs, certificates of deposit (CD) and/or structured products. 

AssetMark

Through its advisor representatives, ESI Financial Advisors designs an investment strategy for clients utilizing asset allocation services from AssetMark. This strategy involves the custodial services of AssetMark Trust Company, Pershing or TD Ameritrade.

Morningstar Investment Services 

An IAR with ESI Financial Advisors works with clients to devise an investment strategy. Morningstar then takes that information to create a portfolio that the firm will rebalance when necessary. Custodial services are provided by Fidelity, Charles Schwab or BNY Mellon. 

Saratoga Advantage Trust 

IARs with ESI Financial Advisors guide a client through setting up investment objectives and an asset allocation strategy. Saratoga Capital Management then recommends portfolio models and sub-advisors to various funds. 

SEI Investments

Through its advisor representatives, ESI Financial Advisors sets objectives and asset allocations. SEI Private Trust Company uses that information to design and manage an investment portfolio. It generally invests in mutual funds in accordance with the client’s goals and risk tolerance. 

ESI Financial Advisors Investment Philosophy

Because ESI Financial Advisors provides its services through various IARs and third-party asset managers, there is no uniform investment philosophy. The firm aims to provide investment advice that takes into account their clients' financial profiles, risk tolerance and other factors in order to help them meet their individual goals. ESI Financial Advisors may turn to various investment strategies, securities and research material. 

Fees Under ESI Financial Advisors

Fees vary widely, depending on the type of investment advisory program as well as the terms and conditions of the third-party asset managers involved and the account size. Additionally, many of these programs involve platform fees. Below, we provide brief descriptions of asset-based fees as they relate to different programs. But keep in mind these may change. You should always carefully read the agreements you sign with ESI Financial Advisors and all entities involved in the management of your account. 

ESI Illuminations 

For third-party strategies, expect to pay a 0.30% platform fee, a management strategist fee that typically ranges from 0.02% to 1.00% and an ESI Financial Advisors service fee that typically ranges from 0% to 2.00%. 

For advisor as portfolio manager services, expect to pay a platform fee that usually ranges between 0.12% and 0.18% and an EFA services fee that runs typically from 0% to 2.00%. 

Assetmark 

Mutual Fund Accounts 

ETF and Privately Managed Accounts 

Morningstar Investment Services

Saratoga Advantage Trust

SEI Investments

IARs may charge varying financial planning fees based on the complexity of the services requested. These fees are charged on a flat-fee basis and generally don’t exceed $10,000. 

What to Watch Out For

In addition to being in RIA, ESI Financial Advisors operates as a broker-dealer. So registered representatives can sell stocks, mutual funds, unit investment trusts, direct participation programs, real estate investment trusts and structured CDs. These dual roles can present potential conflicts of interest. This is also true if advisors are also licensed insurance agents. That said, as an investment advisor registered with the Securities and Exchange Commission (SEC), ESI Financial Advisors must uphold its fiduciary duty to always work in the best interests of its clients. 

Disclosures

In its most recent SEC filings, ESI Financial Advisors reported eight legal or disciplinary events in the past 10 years. Two involved affiliated individuals, two involved affillitated firms and four involved the firm itself. Of these four actions, the firm paid fines that ranged from $20,000 to $300,000. In the most recent action, the SEC alleged that between January 2014 and July 2017, ESI Financial Advisors failed to adequately disclose conflicts of interest associated with its receipt of 12b-1 fee revenue for its selection of certain mutual fund share classes. Without admitting or denying the findings, ESI Financial Advisors agreed to the disgorgement of fees and prejudgment interest to affected clients totaling $587,017. 

For more information, you can read ESI Financial Advisors' Form ADV on the SEC's Investment Adviser Public Disclosure website.  

Tips for Finding the Right Financial Advisor

• Don’t just go with the first financial advisor you look up. To make sure you've got enough information to make this important decision, you should interview at least three candidates. You can find them using SmartAsset's financial advisor matching tool. It recommends up to three local financial advisors based on your personal needs and preferences. 
• Ask prospective advisors if they adhere to a fiduciary standard. Some advisors do only some of the time - and follow a different "suitable" standard when they're, say, acting as your broker. If that's the case, you should be clear on when the advisor would not be acting in your best interest before signing up with him or her.

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