Federated Investment Counseling is a financial advisor firm headquartered in Pittsburgh, Pennsylvania. The firm lays claims to $98 billion in assets under management (AUM), which belongs to nearly 13,500 direct and indirect clients. The advisory team at this firm is around 120 members strong. This firm is entirely focused on investment management services, with no financial planning offerings.
As a fee-only firm, Federated Investment Counseling only receives revenue from fees that client pay. This is much different than a fee-based firm, which can also earn third-party income in the form of sales commissions.
Federated Investment Counseling Background
Federated Investment Counseling opened its doors for the first time in 1989. The firm is wholly owned by a holding company, FII Holdings, Inc., which itself is fully owned by another institution, Federated Investors, Inc., a publicly traded corporation.
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, high-net-worth individuals, pension plans, pooled investment vehicles, government entities, charitable organizations, insurance companies, corporations and one sovereign wealth fund.
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 at this firm are extensive, as each of its large advisory offerings has its own stipulations. These range from no minimum at all to $50 million.
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 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 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 15 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.
Federated Investment Counseling charges its fees on a quarterly basis, in arrears.
What to Watch Out For
For many of its clients, Federated Investment Counseling has performance-based fee structures in place, in which clients pay fees based on the performance of their assets relative to some benchmark. While this could present a potential conflict of interest, the firm's fiduciary duty means that it has an obligation to act in the best interests of its clients at all times.
Federated Investment Counseling has a clean legal and regulatory record, as it doesn’t have any disclosures present on its Form ADV.
Opening an Account With Federated Investment Counseling
If you're interested in finding out more about Federated Investment Counseling, you can pick up the phone and call (800) 245-4770. 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.
Tips for Retirement
- While Federated Investment Counseling doesn't offer financial planning services, many advisors do offer comprehensive financial planning advice. Finding the right financial advisor that understands your needs doesn’t have to be hard. SmartAsset’s free tool matches you with financial advisors in your area in 5 minutes. If you’re ready to be matched with local advisors that will help you achieve your financial goals, get started now.
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