Headquartered in Birmingham, Alabama, ProEquities, Inc. is an independent investment advisor registered with the Securities and Exchange Commission (SEC) and a broker-dealer registered with the Financial Industry Regulatory Authority (FINRA). Its advisors may be investment advisors registered with the SEC themselves, investment advisor representatives (IARs) and/or registered representatives of the broker-dealer arm of the business. They are all independent contractors and business owners.
ProEquities provides these advisors with the tools, technology and investment offerings they need to serve their clients. Counting the assets under their management, ProEquities oversees nearly $3.38 billion in assets. Most of this is on a discretionary basis.
ProEquities also goes by the names Investment Advisors and Protective Equity Services, Inc. It was founded in 1985, though it didn’t become registered as an investment advisor with the SEC until 1998. It is a wholly owned subsidiary of Protective Life Corporation, which in turn is a part of The Dai-Ichi Life Insurance Company, Limited.
ProEquities is affiliated with ProEquities Distributors, Investment Distributors, Inc. and Protective Investment Advisors, Inc. Part of its business is providing investment solutions to its advisors, so to that end, it has a number of marketing partners. They include: Athene, Blackrock, Bluerock, Brighthouse (MetLife), Brinker, CLS, City National Rochdale, Envestnet, FS Investments, Hines, Jackson, Lincoln, Martin, Mutual of Omaha, Owl Rock, Pacific Life, Protective, Prudential, Sammons, Loring Ward, SmartStop, Voya and WE Donoghue.
ProEquities Client Types and Minimum Account Sizes
Advisors with ProEquities work with individuals, corporate pension and profit-sharing plans, fiduciaries to employer-sponsored retirement plans, Taft-Hartley plans, charitable institutions, foundations, endowments, municipalities, corporations and other U.S. institutions. Of their individual clients, the vast majority do not have a high net worth. According to SEC data, the specific numbers are 11,017 individuals who do not have a high net worth vs. 1,108 who do.
Minimum account sizes for ProEquities wrap fee programs range from $5,000 to $100,000, depending on the program. Minimum requirements for accounts managed by third-party money managers depend on the managers.
Services Offered by ProEquities
Through its advisors, ProEquities offers investment advisory services through wrap fee programs (advisor managed and third party managed) and a non-wrap third-party management direct program (TAMP) platform. Money managers on the TAMP platform are with firms AssetMark, First Mercantile, FTJ Fund Choice, Loring Ward, Manning, Napier, Morningstar and SEI.
Advisors also offer financial planning and retirement consulting services.
ProEquities Investing Philosophy
Investing approaches depend on ProEquities advisors and third-party investment advisors. Generally, they may use fundamental and technical methods of analysis to evaluate securities. They may also use tactical asset allocations or strategic asset allocations. Some advisors may customize client portfolios while others may use model portfolios. Additionally, some may invest in a full range of securities while others in mutual funds only.
Fees Under ProEquities
With non-wrap accounts managed by third parties, the advisory fee is shared by the manager and the ProEquities advisor. Fees vary, but generally, they will not exceed 3.0% of client assets under management (AUM). These fees do not cover other costs such as brokerage transaction fees, custodial fees and mutual fund fees.
Accounts in ProEquities wrap fee programs will be charged an advisor fee and a platform fee, both of which follow a tiered schedule. The advisor fee is negotiable, but generally ranges from 1.0% to 2.0%. Platform fees range from 0.04% to 0.31%. Fee-based annuity accounts carry a maximum 0.85% advisor fee and a platform fee that ranges from 0.06% to 0.19%.
What to Watch Out For
Advisors may have additional roles as securities brokers and licensed insurance agents. These other capacities may present potential conflicts of interest. Also, clients may not know whether recommendations are in their best interest or only suitable, as the required standard isn’t the same for every role. So always ask your advisor for the basis of his or her recommendations - and whether and how the advisor and firm may benefit.
In its most recent SEC filings, ProEquities reported 63 legal or disciplinary actions that were resolved in the last 10 years. Two involved affiliate firms and the rest ProEquities itself. The great majority of actions involving the firm was related to the payment of commissions to a broker-dealer who was not registered in the relevant state. To avoid proceedings in almost every state, the firm agreed to a total payment of $435,000 ($8,207.55 to 43 states plus the U.S. Virgin Islands).
All information was accurate as of the writing of this article.
Tips for Finding the Right Financial Advisor
- Want an advisor who has minimal conflicts of interest? Then you need what’s called in the industry a “fee-only” advisor. Use SmartAsset’s free matching tool to find one. Just answer some questions, and we’ll connect you with up to three advisors who meet your preferences.
- When interviewing prospective advisors, ask who will be able to move money out of your account. This is especially important if the firm doesn’t use third-party custodians. Even with a discretionary account, all transfers out of it should have to be authorized by you.