Key Investment Services, LLC (KIS) is a financial advisor firm with $2.55 billion in assets under management (AUM). Its large team of 350 financial advisors provides clients with a range of financial services. These offerings center around investment management, but you’ll also find retirement planning, long-term financial planning and other services. Though KIS accepts a wide range of clients, it mainly works with individuals.
KIS is a fee-based advisory firm. This means that some of its advisors collect transaction-based fees from third parties on top of fees from clients.This differs from a fee-only operation, whose only compensation comes from client fees.
Key Investment Services Background
Established in 2005, Key Investment Services is a subsidiary of KeyBank Capital Markets, Inc. KIS is one of several subsidiaries of KeyBank, one of the largest banks in the U.S. The firm's leadership team is headed by CEO Paul Hansen. He’s been with the company since 2005 and has over 30 years of financial services experience.
Key Investment Services Types of Clients and Minimum Account Sizes
KIS currently manages nearly 17,000 client accounts. The vast majority of these accounts are held by individuals who do not have high net worths, though the firm does work with high-net-worth individuals, too. It also manages accounts for institutional investors including pension and profit-sharing plans, businesses and charitable organizations.
For most of the firm's advisory services, there are no specific account minimums. If you subscribe to any of the firm’s wrap fee programs though, you may need to meet a minimum.
For example, the Lockwood Investment Strategies account requires a minimum investment of $250,000, while the Separately Managed Account (SMA) Program calls for a $100,000 minimum. Other strategies available at KIS have minimums between $10,000 and $25,000. The Key Digital Portfolio robo-advisor program comes with just a $5,000 minimum.
Services Offered by Key Investment Services
KIS helps with five main categories of wealth management:
- Asset allocation planning
- Education savings planning
- Retirement planning
- Saving for a major purchase
- Life, annuity and long-term protection planning
Investors with KIS offers a number of investment account options, including individual retirement accounts (IRAs), education savings plans and HSA investment accounts.
KIS provides some of its financial advising services through third-party firms, such as Lockwood Advisors, Inc. These account options include:
- Lockwood Investment Strategies
- Lockwood AdvisorFlex portfolios
- Lockwood WealthStart program
- 11 model strategies programs
- Envestnet Asset Management, Inc. programs
- Separately managed account program
- Lockwood/American Funds core portfolios
Key Investment Services Investing Philosophy
KIS pursues different portfolio management strategies for clients depending on the type of account they wish to open. However, each account typically pursues a strategy of long-term sustainable growth that limits risk to a level deemed acceptable by the client. KIS and its advisors use financial models and other software to analyze current market conditions and pick investments that will help clients meet their investment goals.
Many clients hold their money in mutual funds managed by KIS advisors. Managed investment portfolio accounts may also invest in exchange-traded funds (ETFs) as well as mutual funds. As noted, the specific investment strategy of each of these various programs depends on which account you’re looking to open.
Fees Under Key Investment Services
KIS charges a fee based on a percentage of your total AUM, but also receives compensation from other sources. More specifically, some members of the advisory staff at the firm earn commissions from certain insurance or securities transactions.
The Lockwood Investment Strategies and SMA programs utilize the most complex fee schedules at KIS. Fees are charged depending on the composition of your portfolio.
|Fees for the Lockwood Investment Strategies Program|
|Portfolio Value||> 50% Equities||> 50% Fixed-Income|
|$250,000 - $500,000||3.00%||2.50%|
|$500,001 - $1,000,000||2.50%||2.00%|
|$1,000,001 - $2,500,000||2.00%||1.50%|
|$2,500,001 and above||1.50%||1.00%|
The two exceptions to the above fee schedule are the Lockwood AdvisorFlex Portfolio Program and the Digital Portfolio Advisor Program. For the former, fees range from 2.00% for balances up to $500,000 to 1.00% for balances above $1 million. The latter charges a 0.50% flat fee for all accounts.
|Mangement Fees for the SMA Program|
|$2,500,001 and above||1.50%||1.50%|
Almost every other KIS account follows the same fee schedule below. Note that this doesn’t include individual money manager fees, which typically hover around 0.20%.
|All Other KIS Management Fees|
|Portfolio Value||Maximum Annual Fee|
|Program minimum - $500,000||1.80%|
|$500,001 - $1,000,000||1.30%|
|$1,000,001 and above||1.00%|
These management fees are higher than the industry average of 0.95%, according to a 2018 study of 1,500 firms by RIA in a Box. Here is the estimated dollar amount you'd pay in advisory fees based on the size of your account in the Lockwood Investment Strategies Program or SMA Program:
|*Estimated investment management fees do not include brokerage, custodial, third-party manager or other fees, which can vary in amount.|
|Estimated Investment Management Fees for Lockwood Investment Strategies or SMA Program*|
|Your Assets||Annual Fee Amount for Equities/Balanced|
The MoneyGuidePro™ software offered by KeyBank is completely free to use.
Learn more about advisors' typical costs here.
What to Watch Out For
Based on information in the company's Form ADV, the firm was found in 2016 to have “failed to identify and apply sales charge discounts to certain customers’ eligible purchases of UITs resulting in customers paying excessive sales charges of approximately $95,254.34.” As a result, the firm was censured, fined $100,000 and ordered to pay $100,247.02 in restitution to customers. Furthermore, a second disclosure from 2019 resulted in a fine of $425,000 and a disgorgement of $134,169.40 plus interest
Also worth noting: as is the case with any fee-based firm, the fact that certain KIS financial advisors can be compensated for the sale of insurance products or securities creates the potential for a conflict of interest. That said, the firm is legally obligated by its fiduciary duty to act in clients' best interests at all times.
Opening an Account With Key Investment Services
To open an account with KIS, you can sign up on its website, visit a branch or call (888) 547-2968.
All information is accurate as of the writing of this article.
Tips for Finding the Right Financial Advisor for You
- Use SmartAsset’s free matching tool. It will connect you with up to three 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.
- Ask prospective advisors what their median account size is. You don’t want to be one of their smallest accounts —or one of the largest. In the first case, you probably wouldn’t get the attention you need. In the latter case, the advisor may not have the experience, know-how or resources to help your account grow.