Kansas City-based Scout Investments is a large financial advisor firm with a group of advisors who manage a collective pool of billions of dollars in investable assets. The majority of the firm's client base is made up of institutional investors, including retirement plans, government entities, charities and more. However, it does still have a few individual clients.
Scout's sole form of compensation is the advisory fees paid by clients, making it a fee-only firm. That's a bit different from a fee-based firm, which can also earn third-party forms of compensation like insurance commissions.
Scout Investments Background
Scout Investments opened in 2001. Most recently, in 2017, Scout became a wholly owned subsidiary of Carillon Tower Advisers, Inc., which is in turn a wholly owned subsidiary of Raymond James Financial, Inc. Raymond James Financial is one of the largest financial services companies in the U.S.
Scout Investments Client Types and Minimum Account Sizes
Scout Investments works with clients all across the institutional and individual spectrum, even maintaining relationships with a handful of investment companies. More specifically, clients of the firm include individuals both with and without a high net worth, pooled investment vehicles, pension and profit-sharing plans, charitable organizations, investment advisors, government entities, insurance companies and corporations.
Minimum investment requirements at this firm vary significantly by program:
- Institutional clients
- Equity strategies: $10,000,000
- Fixed-income strategies: $25,000,000 - $150,000,000
- Separately managed account (SMA) clients: $100,000 - $3,000,000
- Private funds: $1,000,000 - $10,000,000
- General investment advice: $10,000,000
Services Offered by Scout Investments
Services available through Scout Investments are entirely investment-focused, as the firm does not offer financial planning services. The firm's management services are offered through SMAs and consist of a variety of strategies. These include both equity and fixed-inome strategies:
- Mid-Cap Equity
- Small-Cap Equity
- Small-/Mid-Cap Equity
- Mid-Cap Equity Concentrated
- Core Fixed-Income
- Core Plus Fixed-Income
- Intermediate Fixed-Income
- Ultra-Low Duration Fixed-Income
- Unconstrained Fixed-Income
Scout Investments Investment Philosophy
On an individual basis, Scout Investments works to determine the objectives, risk tolerance and time horizon of each client so that advisors can formulate the best possible strategy for them. The firm offers several fixed-income and equity portfolios, as listed above. However, the firm also supplies customized strategies along with socially responsible portfolios. Methods of analysis and specific securities vary significantly between different strategies and client types. Advisors always look to diversify assets to manage risk at an acceptable level.
Fees Under Scout Investments
Advisory fees at Scout Investments are charged based on an annual percentage of each client's total AUM. Institutional clients are subject to a specific fee schedule, while there is also a distinct SMA schedule. Fees are typically billed quarterly, unless otherwise stated.
| Scout Investments Fee Schedule | |
| Program/Strategy | Fee Range |
| Mid-Cap Equity | 0.60% - 0.80% |
| Small-Cap Equity | 0.65% - 0.85% |
| Small-/Mid-Cap Equity | 0.65% - 0.85% |
| Core Plus Fixed-Income & Core Fixed-Income | Up to 0.30% |
| Intermediate Fixed-Income | Up to 0.25% |
| Ultra-Low Duration Fixed-Income | Up to 0.15% |
| Unconstrained Fixed-Income | 0.30% - 0.40% |
What to Watch Out For
Scout Investments has a single disclosure listed on its Form ADV. This is in relation to one of the firm's advisory affiliates, though.
Scout Investments charges performance-based fees to some of its accounts. This creates a potential conflict of interest, in that advisors may have an incentive to recommend riskier or more speculative investments than they would if this arrangement didn't exist. Regardless, the firm is still bound by fiduciary duty, legally binding it to act in clients' best interests no matter what.
Opening an Account With Scout Investments
If you're interested in investing with Scout Investments, you can visit the contact page on the website of Scout Investments or Carillon Towers Advisers. You can also call the firm directly at (800) 521-1195.
All information is accurate as of the writing of this article.
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