Gradient Investments, LLC
Gradient Investments is a fee-only firm with billions of dollars in assets under management (AUM). Headquartered in Arden Hills, Minnesota, the financial advisor offers a range of advisory services to a client base that's almost entirely composed of individual investors.
Gradient Investments Background
The independent and privately-owned firm offers an array of money management and investment advisory services. Gradient operates under the ownership of Charles Lucius through The Charles E. Lucius Arizona Separate Property Revocable Trust, which is an 80% owner. Meanwhile, the Nathan Lucius Revocable Trust is a 10% owner and Luson Capital, LLC owns the another 10%.
The firm’s team includes a number of professionals who hold the chartered financial analyst (CFA) designation.
Gradient Investments Client Types and Minimum Account Sizes
Gradient serves over 22,000 individual clients, a majority of whom do not have a high net worth. The firm also works with several pension and profit-sharing plans.
When it comes to account minimum requirements, the minimums vary based on portfolio type. The firm requires a minimum of $25,000 for its Preservation portfolios and $50,000 for its allocation portfolios, while its strategic and tactical portfolios have a $100,000 account minimum requirement.
Services Offered by Gradient Investments
Gradient Investments primarily offers the following advisory services:
- Portfolio management
- Financial planning
- Pension consulting
Portfolio management is offered on a discretionary basis, meaning Gradient advisors make all buying and selling decisions within a client's portfolio. The firm offers the following portfolio types:
- Preservation Portfolios: Preservation portfolios focus on price stability and capital preservation over income and growth. Preservation portfolios rely on money market mutual funds and bond exchange-traded funds (ETFs).
- Allocation Portfolios: Allocation portfolios strive for diversification and invest in individual equities, as well as equity, bond and alternative ETFs.
- Strategic & Tactical Portfolios: Strategic and Tactical portfolios are both designed to achieve a stated objective. Strategic portfolios may strive for long-term capital appreciation, income or a mix of both. Tactical portfolios, meanwhile, rely on proprietary quantitative methods, as well as bond and equity ETFs.
- Defined Outcome Portfolios: Defined Outcome portfolios are built to achieve prescribed outcomes, primarily by using structured notes.
Gradient Investments Investment Philosophy
Gradient evaluates securities using technical, cyclical and fundamental analysis. Advisors also base investment decisions off investment research software, and the firm utilizes its proprietary Wright Investment Strategy to focus on risk exposure, investment performance and investment strategy. For its managed portfolios, the firm generally invests in ETFs, no-load mutual funds, individual equities and money market funds.
Fees Under Gradient Investments
Gradient is mainly compensated through asset-based and fixed fees. The firm has three different fee schedules for its managed portfolio accounts. Advisors also offer advisory services through an open architecture platform.
For Strategic portfolios, the firm charges an annual advisory fee of 2% on all assets and 1.80% on all assets held in a Tactical Portfolio. Allocation and Defined Outcome portfolios are subject to a 1.70% fee. Preservation portfolios, meanwhile, are charged a 1% asset-based fee. Lastly, Client Directed Accounts are charged a $300 annual fee.
What to Watch Out For
Gradient’s Form ADV only lists one disclosure, although it doesn't specify the exact violation or when it allegedly occurred.
You won't need to worry about your advisor selling you financial products and services to generate commissions. That's because Gradient Investments has a fee-only fee structure, which means advisors are compensated solely for the services they provide and not for the products they recommend.
Opening an Account With Gradient Investments
Prospective clients will have several options for opening an account with Gradient. You can either fill out the firm’s contact form on its website or you can email its inquiry-based email address at info@gradientinvestments.com. You can also set up an appointment with an advisor by contacting the firm at (888) 824-3525.
Tips for Finding a Financial Advisor
- It’s useful to identify which areas of finance you need assistance with before working with a financial professional. Estate planning, retirement planning and investing are just a few of the wealth management services provided by advisory firms.
- Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
All information was accurate as of the writing of this article.
