An indirect subsidiary of Federated Hermes, Inc., Federated Investment Counseling is a financial advisor firm headquartered in Pittsburgh. Its team of advisors oversees over $125 billion in assets on a discretionary basis. This firm is entirely focused on active investment management services, with no financial planning offerings.
The advisory's parent company changed its name (though not its website address) in early 2020 from Federated Investors, Inc. The public company's ticker symbol also changed and is now FHI.
Federated Investment Counseling Background
Federated Investment Counseling first opened its doors in 1989. The firm is wholly owned by a holding company, FII Holdings, Inc., which itself is fully owned by Federated Hermes (formerly Federated Investors), a publicly traded corporation.
The advisory firm is affiliated with Federated MDTA LLC, Federated Investment Management Company, Federated International Management, Ltd., Federated Global Investment Management Corp., Hermes GPE (Singapore) PTE, Ltd., Federated Advisory Services Company, Federated Equity Management Company of Pennsylvania, Federated Investors Trust Company, Federated Investors Canada ULC, Federated Securities Corp., Hermes GPE (US) Inc., Hermes Fund Managers Ireland, Ltd., Federated Investors Australia Services, Ltd., Federated International Securities Corp., Federated Investors Asia Pacific PTY, Ltd., Federated Investors (UK) LLC, Hermes GPE LLP, Hermes European Equities, Ltd., Hermes Investment Management, Ltd. and Hermes Alternative Investment Management, Ltd.
Federated Investment Counseling Client Types and Minimum Account Sizes
Federated Investment Counseling has a robust and diverse client base. Its long list of clients is dominated by individuals (with and without a high net worth). The firm also maintains advisory relationships with banks, pension plans, pooled investment vehicles, government entities, charitable organizations, insurance companies, corporations and sovereign wealth funds and foreign official institutions.
Some of the above clients work directly with this firm. However, many of them utilize Federated Investment Counseling's services as part of their own offerings.
The minimum account size requirements vary widely, depending on the advisory offering. Generally, for managed accounts, the firm requires a minimum $100,000 investment.
Services Offered by Federated Investment Counseling
Federated Investment Counseling provides two primary services to its clients: investment supervisory services and model portfolio management services. The former involves client portfolio customization and ongoing management, and it can be rendered on either a discretionary or non-discretionary basis. The latter is generally offered to other investment advisory firms so they can include them in their suite of offerings. The firm continuously reviews and updates its model portfolios to ensure they are accomplishing their objectives.
Additionally, the firm manages private funds and acts as an advisor or sub-advisor for trust funds, investment companies, pooled investment vehicles and other institutional accounts.
Federated Investment Counseling Investment Philosophy
In formulating its investment advice and recommendations, Federated Investment Counseling typically relies on one or more of the following methods: fundamental analysis, technical analysis, cyclical analysis, quantitative security selection models and subjective evaluation. Here's a breakdown of what each of these methods of analysis entail:
- Fundamental analysis: This attempts to gauge a security's intrinsic value by examining financial documents and the economy at large.
- Technical and cyclical analysis: This involves analyzing past price and market data to aid in the forecasting of future prices.
- Quantitative security selection models: This focuses on how to construct portfolios to optimize for certain factors based on specific assumptions that are chosen on a case-by-case basis.
- Subjective evaluation: This is a broad term that describes the selection of securities based on qualitative factors such as social responsibility or environmental concerns.
Although the firm technically doesn't limit itself to any specific investments, it tends to focus on a few. This list includes stocks, bonds, fixed-income securities, municipal bonds, derivative contracts, exchange-traded funds (ETFs), mutual funds, foreign securities, repurchase agreements and reverse repurchase agreements.
Fees Under Federated Investment Counseling
Investment management fees at Federated Investment Counseling are generally charged as a percentage of the client's assets under management (AUM). For separate accounts and managed accounts, this percentage will vary depending on your investment strategy and the value of your account. The firm has 17 investment strategies to choose from, each with its own fee schedule. Across all strategies, fee rates can dip as low as 0.08% and as high as 0.85%. In some cases, a fixed fee may instead be used. Also, the firm may collect a performance-based fee.
Federated Investment Counseling charges its fees on a quarterly basis, in arrears.
What to Watch Out For
Federated Investment Counseling has a clean record, as it reported no disclosures of legal or disciplinary action in its latest SEC filings.
One thing to note: as mentioned earlier, Federated Investment Counseling may collect a performance-based fee, which is based on returns relative to a set benchmark. This could present a potential conflict of interest. That said, the company has the fiduciary duty to act in the best interests of its clients at all times.
Opening an Account With Federated Investment Counseling
If you're interested in finding out more about Federated Investment Counseling, call (800) 341-7400. You can also visit the firm’s website and fill out the contact form with your name, contact information and a brief message of what you're looking for.
All information is accurate as of the writing of this article.
Tips for Retirement
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