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Fred Alger Management Review

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Fred Alger Management, LLC

Based in New York City, Fred Alger Management, LLC (FAM) is a financial advisor firm that provides a wide range of portfolio management services to clients. The client base of the firm includes both individual and institutional clients. The firm only provides investing-related services, so it has no financial planning offerings.

As a fee-only firm, Fred Alger is compensated solely through advisory fees paid by its clients. That means it does not take third-party forms of compensation, like sales commissions, as a fee-based firm would.

Fred Alger Management Background

Fred Alger Management has been in business for decades, first opening its doors in 1964. The firm is a wholly owned subsidiary of holding company Alger Group Holdings, LLC, which is in turn owned by Alger Associates, Inc. Alexandra D. Alger, Hilary M. Alger and Nicole D. Alger collectively own over 99% of the common stock of Alger Associates, Inc. (AAI). The firm's leadership team is headed by Dan Chung, who acts as the firm's CEO and chief investment officer (CIO).

FAM's advisory staff includes a number of chartered financial analysts (CFAs).

Fred Alger Management Client Types and Minimum Account Size

Fred Alger Management maintains advisory relationships with a variety of different clients. Most of them are non-high-net-worth individuals, as well as a few high-net-worth individuals. FAM also works with just over 100 instituitonal clients, including investment companies, pooled investment vehicles, retirement plans, charitable organizations and state and municipal government entities.

To subscribe to this firm's individual advisory services, you'll need to meet its $10 million minimum investment requirement. However, the minimum for wrap fee accounts is much lower, at $100,000. These minimums are also subject to negotiation and may be waived.

Services Offered by Fred Alger Management

Fred Alger Management provides investment advisory services to its clients through a variety of advisory programs. Institutional investors can take advantage of the firm's services through separate accounts, registered and privately offered funds and a bank collective investment trust.

On the flip side, individuals work with the firm through wrap fee programs that utilize a range of investment strategies, such as:

  • Capital appreciation
  • Focus equity
  • Dynamic return
  • Dynamic opportunities
  • Emerging markets
  • Growth & income
  • Health sciences
  • International focus
  • Global focus
  • Large-cap growth
  • Mid-cap growth
  • Mid-cap focus
  • Small-cap growth
  • Small-cap focus
  • SMid-cap focus
  • Spectra
  • Socially responsible (SRI) capital appreciation
  • Balanced
  • Responsible investing
  • Alger 25
  • Alger 35

Fred Alger Management Investment Philosophy

Rather than create individualized portfolios for each individual client, Fred Alger Management and its advisors will help clients pick the right in-house investment program and associated mix of strategies. These choices are based on the client's personal risk tolerance, time horizon, investment goals, income and liquidity needs and more. The majority of the firm's strategies identify and invest in companies experiencing high-unit volume growth and positive life cycle changes.

FAM typically uses a thorough combination of both qualitative and quantitative analysis to help select proper investments for client portfolios. Many times investments are limited to U.S. and foreign equities, though the firm also provides advice on options contracts, warrants, private placements, convertible securities, corporate debt securities and mutual funds.

Fees Under Fred Alger Management

Fred Alger Management charges clients fees based on an annual percentage of their total AUM. Ther specific fees charged vary based on the type of strategy used in each client account. Fees may be negotiable, and they are charged on either a monthly or quarterly basis.

Fred Alger Management Fee Schedule
Program/Strategy Annual Fee Range
Large-Cap Growth 0.35% - 0.65%
Mid-Cap Growth 0.50% - 0.70%
Small-Cap Growth 0.50% - 0.85%
Responsible Investing 0.40% - 0.65%
Capital Appreciation 0.35% - 0.65%
Focus Equity 0.30% - 0.40%
Small-Cap Focus 0.60% - 0.75%
Spectra 0.44% - 0.74%
Growth & Income 0.30% - 0.50%
Emerging Markets 0.60% - 0.80%
International Focus, Global Focus 0.60% - 0.75%
SRI Capital Appreciation 0.40% - 0.68%
Dynamic Growth 0.55% - 0.75%
Dynamic Return 1.00%
Mid-Cap Focus 0.50%-0.65%
Alger 35 0.30%-0.40%

 

What to Watch Out For

Fred Alger Management takes performance-based fees from certain client accounts. This creates a potential conflict of interest, as advisors may have an incentive to invest in riskier or more speculative securities in pursuit of such fees. Despite this, the firm is a fiduciary, which means it is legally obligated to act in the best interests of clients at all times.

If you're looking for financial planning services, FAM will not be able to meet your needs. SmartAsset's free tool can match you with advisors in your area who do offer financial planning.

There are no open disclosures listed for Fred Alger.

Opening an Account With Fred Alger Management

If you're an investor looking to open an account with FAM, stop by the firm's website. There, you'll find several contact options, including email and calling the firm's main phone number, which is (800) 223-3810.

Retirement Planning Tips

  • A financial advisor could be a big help in sorting out your retirement plans. Luckily, finding an advisor in your area isn't hard with SmartAsset's free matching tool. If you're ready, get started now.
  • To figure out whether you're on track for a secure retirement, take a look at SmartAsset's retirement calculator. To get an accurate figure, you'll need to enter where you plan to retire, your annual income and how much you have saved, among other key data points. Then, the calculator will let you know where you stand and whether you need to get more aggressive.

How Long $1mm Lasts in Retirement

SmartAsset's interactive map highlights places where $1 million will last the longest in retirement. Zoom between states and the national map to see the top spots in each region. Also, scroll over any city to learn about the cost of living in retirement for that location.

Least
Most
Rank City Housing Expenses Food Expenses Healthcare Expenses Utilities Expenses Transportation Expenses

Methodology We analyzed data on average expenditures for seniors, cost of living and investment returns to determine how many years of retirement a $1 million nest egg would cover in cities across America.

First, we looked at data from the Bureau of Labor Statistics (BLS) on the average annual expenditures of seniors. We then applied cost of living data from the Council for Community and Economic Research to adjust those national average spending levels based on the costs of each expense category (housing, food, healthcare, utilities, transportation and other) in each city. Using this data, SmartAsset calculated the average cost of living for retirees in the largest U.S. cities.

We assumed the $1 million would grow at a real return (interest minus inflation) of 2%. Then, we divided $1 million by the sum of each of those annual numbers to determine how long $1 million would cover retirement expenses in each of the cities in our study. Cities where $1 million lasted the longest ranked the highest in the study.

Sources: Bureau of Labor Statistics (BLS), Council for Community and Economic Research