Originally founded in the 1930s, Stephens, Inc. has a long background in the American financial sphere. A pioneer in private equity, the firm is best known for having helped Walmart, a local discount retailer at the time, raise capital through an IPO. Stephens not only has advisory offices dotted all over the U.S., it also runs international branches in Frankfurt, Germany and London.
This asset management-centric firm also specializes in other areas of finance, like insurance, taxes, wealth planning and more. It is headquartered in Little Rock, Arkansas
In business since 1933, Stephens Inc. is a full-service broker-dealer and investment bank that offers advisory services. Stephens, Inc. is led by chairman and CEO Warren A. Stephens, a son of one of the company’s founders. He began his career with the firm back in 1986. Today, the firm is owned by SI Holdings, Inc., a holding company, which is in turn own by Warren Stephens.
Stephens Client Types and Minimum Account Sizes
Stephens, Inc. provides asset management services to individuals with and without a high net worth, banking or thrift institutions, pension and profit-sharing plans, charitable organizations, government entities, insurance companies and non-corporate organizations.
The minimum investment required to take advantage of the various services at Stephens differ by program. These range from no minimum at all up to $1 million, though the firm reserves the right to alter these requirements.
Services Offered by Stephens
Stephens, Inc. mainly offers asset management advice around exchange-traded funds (ETFs) that invest in equities and fixed-income securities. The firm’s mission is to capture high total returns on investments by focusing on index funds. On occasion, the firm may consider mutual fund investments if it deems them appropriate for your situation.
The firm appoints an investment advisor to each client’s account. This person will meet with clients at least once a year to discuss their investment portfolios and changing financial goals. However, clients are free to contact their personal advisor at any time to discuss their accounts or any other questions or concerns they may have.
In addition, the firm’s advisors specialize in the following financial topics:
- Investment banking
- Capital management
- Institutional equities and research
- Private equity
- Fixed-income sales and trading
- Wealth planning
- Tax planning
Stephens Investment Strategy
Stephens, Inc. begins its investment strategy by analyzing indexes that track segments of the market it may want to invest client assets in. Using software from Morningstar, the firm builds model portfolios using these indexes. It aims to devise portfolios that have potential for the highest returns for a given risk and diversification level, based on the historical performance of these indexes. Stephens updates these models on at least an annual basis.
Depending on your individual circumstances, such as risk tolerance and time horizon, the firm applies one of these models to your assets. The firm also considers external factors such as broad stock market earnings, the interest rate environment and the outlook for inflation and rates. Clients may contact the firm to request certain investment limitations within their portfolio.
Fees Under Stephens
Clients of Stephens, Inc. will adhere to a separate fee schedule that's based on the program they subscribe to. In general, though, the firm charges advisory fees based on a prespecified percentage of the client's overall AUM at the firm. Fees can be charged either in advance or in arrears.
For investment services, Stephens uses both standard fee and wrap fee arrangements. In the former, the firm will charge you an advisory fee, which is in addition to transactional, brokerage and custodial fees. For a wrap fee account, all of these fee categories will be consolidated into a single rate.
What to Watch Out For
Stephens, Inc. has 12 disclosures on its regulatory record. For example, in March of 2019, the firm entered a Share Class Selection Disclosure Initiative with the SEC. The order alleged that Stephens did not properly disclose conflicts of interest in connection with the recommendation of mutual fund share classes that paid 12b-1 fees to Stephens when less expensive share classes of the same fund that would not pay these fees were available. According to the firm’s Form ADV, the SEC issued a cease and desist order, in addition to ordering that Stephens be censured and pay disgorgement and prejudgment interest to advisory clients who held these more expensive mutual fund share classes in their advisory accounts.
On occasion, Stephens may charge client accounts performance-based fees. This may incentivize portfolio advisors to take on more risk to capture stronger returns. The firm is still a fiduciary, though, legally binding it to act in clients' best interests at all times.
Stephens is also affiliated with various financial services firms, such as investment banking and insurance companies, as well as other asset management firms. Through some of these relationships, the firm or its advisors may earn commissions or other forms of compensation. Again, though, the firm is required by law to act in clients' best interests due to its fiduciary duty.
Opening an Account With Stephens
To contact Stephens, you can call the firm over the phone at (501) 377-2000. Since the company has 27 other offices across the U.S., plus international branches in London and Frankfurt, you also have lots of options for visiting in person or reaching out over the internet via email or the firm's website.
All information is accurate as of the writing of this article.
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