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RBC Wealth Management Review

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RBC Wealth Management

RBC Wealth Management is a division of RBC Capital Markets, LLC, which is a subsidiary of Royal Bank of Canada. The firm has $348 billion in U.S. private client assets under management. It has 1,800 financial advisors on staff and operates in 200 locations across 40 states. 

The division serves individuals and families, retirees, business owners and corporations and institutions. The firm’s account minimums vary by program and service, and start at $2,500. RBC Wealth Management provides a full suite of banking, investment, trust and wealth management services, as well as asset management services both through its own business and through third parties.

RBC Wealth Management Background

RBC Wealth Management has existed in its current form since 2008. The firm originally operated under the name Dain Rauscher, until it was acquired by the Royal Bank of Canada in 2001. The firm originates from numerous regional firms across the U.S. that came together to form the wealth management firm, which is now the world's fifth-largest wealth manager by assets, according to Scorpio Partnership's Global Private Banking's 2017 benchmark report.  

RBC Wealth Management is a division of the Royal Bank of Canada subsidiary, RBC Capital Markets, LLC.

What Types of Clients Does RBC Wealth Management Accept?

RBC Wealth Management works with individuals and families, as well as retirees. Its services for these clients include cash and credit solutions, trust services, insurance solutions, investments and research, retirement income planning, funding education, gifting and philanthropic solutions and responsible investing. It also specializes in working with business owners, offering many of the aforementioned services as well as retirement plans.

RBC Wealth Management’s client base also includes corporations and institutions. For these clients, RBC can provide retirement plans, corporate and executive services and fiduciary support through institutional consulting services.

RBC Wealth Management Minimum Account Sizes

Like many large wealth management firms that offer a wide range of services and account types, RBC Wealth Management’s requirements for its minimum account sizes vary by program. The firm’s individual advisory services have the following minimums:

  • RBC Unified Portfolio: $2,500
  • RBC Total Portfolio
    • $250,000 for accounts that use model portfolios
    • $25,000 for accounts that use only mutual funds and/or ETPs
  • Consulting Solutions: $100,000*
    • *Accounts that use RBC Wealth Management as the overlay manager may have a different account minimum. This minimums depend on the model portfolio selected and can range from $2,000 to $250,000, for fixed income accounts.
  • Managed Account Program (MAP): $100,000 or the investment managers’ minimum, whichever is greater
  • Portfolio Focus: $50,000
  • RBC Advisor: $25,000

Meanwhile, the minimum for the firm's Institutional Consulting program is generally $5 million.

Services Offered by RBC Wealth Management

RBC Wealth Management sponsors a number of customized advisory programs. In each program, RBC Wealth Management works with clients to determine their objectives and needs, which will inform their investment strategy. The firm's offered programs include:

  • RBC Unified Portfolio: Client accounts are unified managed accounts that are managed by RBC or third-party overlay manager, Envestnet Asset Management.
  • RBC Total Portfolio: Another unified managed account in which client accounts are managed professionally by Envestnet Asset Management. 
  • Consulting Solutions: Clients can select an investment manager or model provider, as well as the investment strategy. 
  • Managed Account Program (MAP): Client accounts are managed by one or more investment manager selected based on their risk profile.
  • Portfolio Focus: Client accounts are managed by RBC based on their risk profile and an evaluation of their objectives and needs. 
  • RBC Advisor: Clients receive non-discretionary advice on eligible securities, as well as a investment strategy based on their risk profile. 

In addition to investment portfolios, RBC offers:

  • Cash and credit solutions
  • Corporate and executive services
  • Estate planning solutions
  • Fiduciary support through institutional consulting services
  • Education funding planning
  • Gifting and philanthropic solutions
  • Insurance solutions
  • Private wealth services
  • Retirement income planning
  • Retirement plans
  • Trust services

RBC Accounts for High-Net-Worth Individuals

For wealthy investors, RBC offers RBC Private Wealth, a program exclusively available to clients who have invested at least $5 million with RBC. This program is focused on addressing the financial needs that arise from having substantial wealth.

Its three main areas of focus are wealth accumulation, wealth protection and wealth distribution during and after your lifetime. The first, wealth accumulation, includes investment management, strategies for exercising stock options and restricted stock and business ownership interests. Wealth protection covers areas like insurance needs and powers of attorney, while wealth distribution covers gifting to family members and charities. 

For high-net-worth families, RBC also offers the Wealth Management Professionals Group. This group gives these clients greater access to experts throughout RBC's global network who have expertise in areas including estate planning and asset protection.

Hiring a Third-Party Manager Through RBC Wealth Management

As noted in the offered services section, a number of RBC Wealth Management’s programs may be managed by a third party. Its RBC Total Portfolio, specifically, is a unified managed account overseen by Envestnet Asset Management. This third-party manager may also oversee RBC Unified Portfolios.

Different programs incur different investment manager or overlay manager fees, in addition to the RBC Wealth Management Advice Fee that's applied to all accounts.

Investment Philosophy

The exact strategy and investing approach employed by RBC Wealth Management will depend on the program selected and a client’s goals, circumstances, time horizon and risk parameters. The firm's advisors will help clients to determine an asset allocation strategy and select investments and then monitor portfolio performance. Portfolios will be rebalanced and investment strategies will be updated as needed.

The firm says that its client accounts generally consist of a mix of securities, including:

  • Equity securities
  • Bonds 
  • Mutual funds
  • Alternative investments
  • Exchange-traded products, including exchange-traded funds and exchange-traded notes

The firm can create customized solutions designed to reach a wide range of goals, from growing or protecting your wealth to planning for retirement or providing for your family.  Additionally, it offers responsible investing, which allows clients to invest in accordance with their personal values.

Fees Under RBC Wealth Management

For its investment advisory services, the fee-based firm may charge clients a percentage of assets under management, fixed fees and/or commissions. Clients who have accounts enrolled in an advisory program are charged an annual asset-based fee that's owed quarterly in advance.

Exact fee percentages vary not only depending on program, but also depending on the size of the account, the length of time you've had the account, the overall amount of business you conduct with RBC and the types of securities and services provided. However, RBC Wealth Management says that the maximum annual orogram fee will generally be less than 3%. Its fee schedule lists the annual rate for accounts of up to $24,999,999 as 2.50%. For accounts of greater value, the fee rate is negotiable.

Uniquely, clients in MAP (Managed Account Program) can choose between a fee method or a commission method. Under the latter method, clients pay the firm for each securities transaction.

In addition to program fees, clients may pay management fees for investment managers and model providers, tax management fees and overlay management fees. If RBC Wealth Management is the overlay manager, it will retain 0.05% of the program fee.

The table below gives you an idea of how RBC Wealth Management stacks up. Keep in mind that these fees are estimates and your exact fees will vary depending on the specifics of your account.

Estimated Fee Comparison*
Your Assets RBC WM Advice Fee** National Median Advisory Fees***
$500K $12,500 $5,000
$1MM $25,000 $8,500 - $10,000
$5MM $125,000 $25,000 - $32,500
$10MM $250,000 $50,000
*Fee estimates only consider the maximum base fees for the services each firm provides. You may also pay manager fees and other fees, which can vary in amount.  **This applies to Portfolio Focus and RBC Advisor programs; other programs may incur additional or varied fees. ***All figures are based on median fee levels according to Bob Veres' 2017 Planning Profession Fee Survey. The above estimates solely take into account AUM-only fees. Total costs will likely be higher due to additional expenses.

RBC Wealth Management Awards and Recognition

RBC Wealth Management has won numerous awards both in the U.S. and internationally. In 2017, The Human Rights Campaign named the firm a best place to work for LGBT equality. The other U.S. award it picked up in 2017 was Private Banker International’s Best Initiative of the Year in Relationship Management (in North America) award.

What to Watch out For

Unlike many other wealth management firms, RBC Wealth Management’s fee schedule is not tiered. Though there is a breakpoint, that does not apply until portfolios reach a value of $25 million. This means that accounts of more than $1 million may incur higher fees than they would at comparable firms, as the fee percentage charged for accounts of $250,000 is the same as the percentage charged for accounts of $10 million. 

Additionally, RBC Wealth Management notes that not all of its advisors may be able to offer all of the programs listed above. However, you may be able to access these services through another financial advisor at the firm. 

The firm also has disciplinary issues on record - see below.

Disclosures

RBC Wealth Management, like many massive wealth management firms, does have disclosures. However, as RBC Wealth Management is part of RBC Capital Markets, LLC, many of the disclosures apply to the larger organization as a whole. RBC also notes that it hasn't admitted or denied to allegations when it's entered into various orders, consents and settlements.

In 2016, for example, RBC Wealth Management was one of a dozen firms fined by FINRA for "significant deficiencies" in its protection of broker-dealer and client data. Though in RBC's case there wasn't evidence of hacking or a breach, it was fined $3.5 million. In 2015, FINRA fined the company $1 million for not properly overseeing the sales of complex securities to clients.

Opening an Account With RBC Wealth Management

To open an account with RBC Wealth Management, you must sign an advisory agreement before enrolling in any of its available programs. This agreement gives your the firm permission to make certain transactions in your account and update it as you request. 

Most programs require you to sign the RBC Advisory Master Services Agreement. However, for Consulting Solutions, MAP, Portfolio Focus, RBC Advisor and RBC Total Portfolio programs, you're required to sign a separate client agreement, called the Single Program Agreement. This serves a similar purpose to the Master Services Agreement, though it may have slightly different conditions. 

RBC Wealth Management offers two ways for prospective clients to begin this process and speak to an advisor: They can either provide their contact information to have RBC contact them or they can fill out a brief survey to get matched with an advisor who suits their needs. The firm's website also has an advisor directory, so you can see if there are advisors and branch locations near you. 

Where Is RBC Wealth Management Located?

RBC Wealth Management’s principal office is located in the World Financial Center building in downtown Manhattan. It has offices across the U.S., with 200 locations in 40 states. Additionally, there’s a separate  international division of RBC Wealth Management that has offices in Canada, the U.K., Asia, the British Isles and the Caribbean.

Tips for Finding a Financial Advisor

  • Finding the right financial advisor that fits 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.  
  • Do your due diligence. Be sure to talk to a few financial advisors before settling on one, and ask them questions to get a good understanding of the fees they charge and their investment approach.

How Many Years $1 Million 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 To determine how long a $1 million nest egg would cover retirement costs in cities across America, we analyzed data on average expenditures for seniors, cost of living and investment returns.

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%. This reflects the typical return on a conservative investment portfolio. 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