T. Rowe Price is a massive, retirement-centric asset management firm that's headquartered in Baltimore and employs hundreds of financial advisors. The firm's services are wide-ranging, as it works with both individuals and institutions. Through T. Rowe Price, individuals can open brokerage accounts, IRAs and college savings accounts. They can also take advantage of retirement income planning services, high-net-worth private asset management, investment planning and more.
Institutional clients make up a large percentage of T. Rowe Price's overall client base. These include investment companies, retirement plans, businesses and more. While the firm isn't technically advising most of the individuals who are part of these institutions, they still work with T. Rowe Price in an indirect capacity. The firm also manages its own mutual funds, which are called the TRP Mutual Funds.
T. Rowe Price is a fee-only firm. This means that its income only comes from client-paid advisory fees. A fee-based firm operates differently, receiving both advisory fees and third-party compensation (for instance, insurance sales commissions).
T. Rowe Price Background
Originally founded in 1937, T. Rowe Price now consists of multiple U.S. and international arms. The institutional branch of the firm goes by T. Rowe Price Associates, whereas the individual-focused side is known as T. Rowe Price Advisory Services. The firm is a wholly owned subsidiary of T. Rowe Price Group, Inc., which is a publicly traded holding company. T. Rowe Price has over 20 branches across the globe, with six of them being located in the U.S.
Of the hundreds of financial advisors employed by this firm, there are a significant number that hold advisory certifications. These include chartered financial analysts (CFAs), certified financial planners (CFPs) and more.
T. Rowe Price Client Types and Minimum Account Sizes
T. Rowe Price works with an incredibly diverse mix of clients between its multiple U.S. arms. More specifically, it maintains advisory relationships with thousands of individuals both above and below the high-net-worth threshold, as well as hundreds of institutions. This group encompasses investment companies, pooled investment vehicles, retirement plans, charities, state and municipal government entities, insurance companies, sovereign wealth funds, corporations, separately managed account (SMA) programs and banking institutions. The individuals who access T. Rowe Price's services through an institution are technically indirect clients of the firm.
The minimum account size at this firm varies significantly depending on the type of account or strategy that's being used by the client. These minimums can range from as little as $100,000 to as much as $200 million.
Services Offered by T. Rowe Price
T. Rowe Price is a global asset management firm, and, as a result, it tends to focus on investment-related services. Here's a breakdown of the plethora of offerings available here:
- Brokerage services
- Individual advisory services
- Advisory Planning Service
- In-depth personal financial and investment plan centered around specific retirement or savings goals
- Retirement income planning
- Annual account reviews
- ActivePlus Portfolios
- Based around model portfolios
- Direct customer service
- Annual account check-ins
- Investment Allocation Tool
- Personalized risk- and goal-adjusted asset allocation planning
- Private Asset Management
- For high-net-worth individuals, families, trusts, endowments and foundations with at least $5 million in investable assets
- Customized investment program
- Tax management
- Advisory Planning Service
- Institutional advisory services
- Institutional Separate Account Management
- Equity- and fixed-income-focused strategies for institutional clients
- Managed Account Programs
- Discretionary investment management for SMA or wrap fee programs that are sponsored by outside advisors or broker-dealers
- Model Portfolios
- Consists of portfolios built around T. Rowe Price's in-house mutual funds
- Available through third-parties
- Sponsored and Sub-Advisory Mutual Fund Management
- For third-party financial institutions
- Distribution Management Service
- Involves helping institutional clients decide when to sell stock distributions from venture capital partnerships
- Multi-Asset Solutions
- Customized portfolio creation using multi-asset strategies
- Stable Asset Management
- Pooled and separate account investment management
- Institutional Separate Account Management
- In-house services
- Management of T. Rowe Price's own funds
T. Rowe Price Investment Philosophy
T. Rowe Price works with clients to help them grow their assets in a way that aligns with their financial goals. With more than 100 investment strategies and management services, the firm has plenty of options for every type of client who might walk through its door. An inherent effect of having this many strategies is that the firm's specific investment approaches varies significantly.
The firm and its advisors work with clients to determine their investment objectives and other important factors, like risk tolerance, time horizon and income needs. The firm builds portfolios using a wide range of investments that are chosen based on what the client is looking for. Advisors use a mix of internal and external resources to help inform their investment decisions. In most cases, once the requested services are provided by the firm, it will then conduct ongoing analysis of the associated returns.
Fees Under T. Rowe Price
There is no standard fee schedule at T. Rowe Price, as its corpus of services are quite vast. In many cases, though, institutional and individual clients alike are charged fees based on a percentage of their total AUM. These fee schedules differ significantly between accounts, strategies and programs, and they are sometimes negotiable. Fees are typically calculated and billed on a quarterly basis.
Some of the firm's individual services, like the Advisory Planning Service, the ActivePlus Portfolios Program, the Investment Allocation Tool and the Retirement Fund Recommendation Service, do not come with any fees whatsoever. In these cases, the firm will earn compensation through the funds that the client invests in instead of doing so through a traditional fee arrangement.
What to Watch Out For
T. Rowe Price's two main, U.S.-based advisory arms have a combined one disclosure between them. However, this disclosure is in reference to one of the firm's advisory affiliates, meaning it's not attributed to the firm directly.
Some institutional accounts at T. Rowe Price may incur performance-based fees. This presents the potential for a conflict of interest, as advisors may have an incentive to be riskier or more speculative than they would be if this setup did not exist. Despite this, the firm is a fiduciary, legally obligating it to act with clients' best interests in mind at all times.
Opening an Account With T. Rowe Price
T. Rowe Price has offices around the world, including throughout the U.S., Canada, Europe, the Middle East, and Asia. Through its website, you can find phone numbers for all of the firm's branches. To reach the firm's main line, call (410) 345-2000. Otherwise, visit T. Rowe Price's website to open an account.
Tips for Saving for Retirement
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