Richard Bernstein Advisors (RBA) is a New York-based financial advisor firm that has been serving clients for over a decade. Since opening its doors, the firm has grown to serve more than 8,000 clients, most of whom are individuals who don't have a high net worth. The firm manages $3.5 billion in assets under management (AUM) for these clients.
Richard Bernstein Advisors is a fee-only firm, meaning it earns income exclusively from the advisory fees that its clients pay. This is different from a fee-based firm, which may also earn sales commissions and other forms of third-party compensation.
Richard Bernstein Advisors Background
Richard Bernstein Advisors was founded by its nameseake, Richard Bernstein, in 2009. Bernstein still serves as the firm’s CEO and chief investment officer (CIO). Before founding the firm, Bernstein worked as the chief investment strategist at Merrill Lynch & Co.
The firm employs eight advisors in total, which is a relatively small staff compared to firms with similar assets under their supervision. Five of these advisors are chartered financial analysts (CFAs), and one is a certified investment management analyst (CIMA).
Richard Bernstein Advisors Client Types and Minimum Account Sizes
Richard Bernstein Advisors works with around 8,250 clients. All but around 10 of them are individuals below the high-net-worth threshold, according to the firm’s Form ADV. It also works with government entities, proprietary accounts and two investment companies, which account for half of the firm’s overall AUM.
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, in which the clients work with an intermediary who in turn works with the firm. It also provides investment strategies to several different wrap fee programs sponsored by other firms. In addition to these practices, certain clients also receive investment services directly from Richard Bernstein Advisors.
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 the client's 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.
What to Watch Out For
In some cases, Richard Bernstein Advisors receives 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." Despite this incentive, the firm is legally obligated by its fiduciary duty to act in the best interests of its clients.
Richard Bernstein Advisors doesn’t have any disclosures listed on its Form ADV. Therefore, it has a clean legal and regulatory record according to the U.S. Securities & Exchange Commission (SEC).
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 email@example.com.
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