Unlike most financial advisors, Richard Bernstein Advisors LLC takes a top-down macro approach to asset allocation.
Founder Richard Bernstein and other advisors at the firm can often be seen on business cable channels or quoted in publications like the Wall Street Journal. Over his long career, Bernstein has racked up a number of accolades, including Fortune magazine's "All-Star Analyst" and Institutional Investor's "All-America Research Team." He is the author of the seminal textbook "Style Investing — Unique Insight into Equity Management."
Richard Bernstein Advisors Background
Bernstein started his namesake firm in 2009 after serving as Chief Investment Strategist at Merrill Lynch & Co. Today, he is his own firm’s CEO, Chief Investment Officer and majority owner.
The firm employs nine advisors in total, which is a relatively small staff compared to firms with similar assets under their supervision. Six of these advisors have MBAs, seven are chartered financial analysts (CFAs) and two are certified investment management analysts (CIMAs).
Richard Bernstein Advisors Client Types and Minimum Account Sizes
Richard Bernstein works with non-high-net-worth individuals, as well as other investment companies and state or municipal governments, according to the firm’s Form ADV.
Richard Bernstein Advisors imposes a minimum account size of $10 million for its direct separately managed accounts (SMAs). For wrap fee programs and institutional advisory services, minimums can vary depending on a number of different factors.
Services Offered by Richard Bernstein Advisors
Richard Bernstein Advisors provides clients with investment management services in a few different ways. One is through the aforementioned SMAs, either directly for individuals and clients or indirectly as subadvisor. It also provides investment strategies to several different wrap fee programs sponsored by other firms.
The firm advises institutions as well, providing model portfolios to other investment advisors and acting as a sub-advisor to mutual funds and other open-ended investment companies.
Richard Bernstein Advisors Investment Philosophy
For many of Richard Bernstein Advisors' portfolios, the goal is to achieve a favorable return over the long term. The firm seeks to reach this goal through quantitative portfolio construction and a top-down analysis of broad, macroeconomic factors. This top-down approach prioritizes asset allocation planning based on various economic indicators, rather than individual security selection.
When it comes time to select individual securities, the firm uses quantitative models to help ensure proper exposure to certain markets. Additionally, the firm tends to invest in equities, exchange-traded funds (ETFs) and more.
Fees Under Richard Bernstein Advisors
For clients utilizing RBA's SMA program, the firm charges up to a 1.25% annual fee that’s based on a percentage of AUM. The exact percentage that you'll pay will vary depending on the chosen investment strategy. The same fee arrangement applies to the firm's institutional investment management services.
When it comes to the firm's wrap fee program services, the client will generally pay a quarterly fee to the program sponsor, who will then compensate Richard Bernstein Advisors. These fees are completely variable, with factors like account size, program type and program sponsor affecting the fee schedule clients will adhere to.
The firm may also charge a performance-based fee to certain clients.
Richard Bernstein Advisors Awards and Recognition
Over the years, Richard Bernstein has received a lot of recognition. Foremost, he is considered an expert on equity, style and asset allocation. He is also in the Institutional Investor's "Hall of Fame."
What to Watch Out For
Richard Bernstein Advisors had no disclosures of legal or regulatory action in its latest filings with the U.S. Securities & Exchange Commission (SEC).
As a fee-based firm, Richard Bernstein Advisors can receive performance-based fees. According to the firm's Form ADV, "Performance-based compensation arrangements create an incentive for RBA to recommend investments that may be riskier or more speculative than those that might be recommended under a different fee arrangement, such as a management fee only arrangement." That said, the firm is legally obligated by its fiduciary duty to act in the best interests of its clients.
Opening an Account With Richard Bernstein Advisors
If you’d like to work with Richard Bernstein Advisors, you can get in touch in a few different ways. You can either call the firm’s New York headquarters at (212) 692-4088, or you can send an email to info@rbadvisors.com.
All information is accurate as of the writing of this article.
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