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Tortoise Capital Advisors Review

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Tortoise Capital Advisors

Tortoise Capital Advisors is a financial advisor firm based in Leawood, Kansas that has been providing investment management services since its founding in 2002. The firm’s team of advisors manages more than $17.5 billion in client assets. The client base at Tortoise Capital is about as inclusive as any you'll come across. In fact, it includes individuals with and without a high net worth, as well as a number of institutional clients, such as pension plans, businesses and charitable organizations. The firm is 

Unlike a fee-only firm, which receives compensation solely from client fees, Tortoise Capital Advisors is a fee-based firm, which means certain advisors can also earn compensation from outside sources. In the case of Tortoise Capital Advisors, this refers to compensation earned by certain advisors who double as registered representatives of a broker-dealer; these advisors receive commissions for selling placements in private funds that the firm advises. This represents a potential conflict of interest, though the firm's fiduciary duty compels it to act in its clients' best interests at all times. 

Tortoise Capital Advisors Background

Tortoise Capital Advisors has been doing business in the Kansas City area since 2002. The firm is a wholly owned subsidiary of Tortoise Investments, LLC, which is in turn owned and controlled by Lovell Minnick, a private equity investment firm. The shares that Lovell Minnick doesn't own belong to a group of institutional co-investors.

Although Tortoise has just over 100 employees, just 43 of them perform advisory functions according to the firm’s Form ADV. Many of these advisor hold some sort of professional certification, like chartered financial analyst (CFA) and certified public accountant (CPA).

Tortoise Capital Advisors Client Types and Minimum Account Sizes

Tortoise Capital Advisors has more than 900 clients. High-net-worth individuals are its most common client type. The rest of the clients are a mix of non-high-net-worth individuals, investment companies, pooled investment vehicles, pension plans, charitable organizations, government entities, insurance companies, investment advisors, sovereign wealth funds, corporations and foundations.

To become a client of Tortoise Capital Advisors, you generally need to have at least $100,000 in investable assets and that number can range up to $250,000 in investable assets. However, the firm may make exceptions to this rule under certain circumstances.

Services Offered by Tortoise Capital Advisors

Tortoise Capital Advisors primarily provides investment management services to both individual and institutional clients in the area of energy securities and what the firm terms “essential asset companies.” The firm describes essential assets as those that are crucial to both the economy and broader society. Examples of this are healthcare companies, wind/solar power networks, energy pipelines and more.

Additionally, Tortoise acts as investment advisor to several private investment funds and provides model portfolio services to several financial intermediaries. The firm also provides investment management services to participants of several different wrap fee programs. The investment strategies used to manage these assets are similar to those used to manage other client accounts.

Tortoise Capital Advisors Investment Philosophy

Tortoise Capital Advisors generally focuses its attention on investments in the energy sector or those concerning essential assets, as described above. When constructing client portfolios, the firm will usually stick to a long-term approach. However, short-term transactions may be considered if they make the most sense for the client’s personal situation. However, these strategies are typically much pricier.

The firm analyzes many different factors when selecting securities. These include each investment’s risk, cash flow, management, growth prospects, liquidity, market sensitivity and overall value. By combining these characteristics and analyzing them using qualitative analysis, quantitative analysis and relative value analysis, the firm can surmise a security's intrinsic value for a more accurate evaluation.

Fees Under Tortoise Capital Advisors

For the advisory services Tortoise Capital Advisors provides to separately managed accounts and private funds, the firm customarily charges a percentage-based fee of no more than 1.00%. For clients that invest using the firm’s private sustainable infrastructure strategy, this rate can jump as high as 2.00%. For private funds, the maximum fee rate is 1.25%. Fees for Tortoise Funds range from 0.85% to 1.35%. Management fees at Tortoise are negotiable and may vary from these benchmarks in certain situations.

Tortoise Capital Advisors also uses performance-based fees

What to Watch Out For

Tortoise Capital Advisors has no disclosures listed on its Form ADV, giving it a clean legal and regulatory record.

Tortoise Capital Advisors charges performance-based fees, which creates the potential for a conflict of interest. As the firm’s Form ADV states, “Conflicts of interest arise from our side-by-side management of performance fee-based accounts and non-performance fee-based accounts, as well as accounts with differing levels of asset-based fees, at the same time because we have a financial incentive to favor higher fee-paying accounts over other accounts in the allocation of investment opportunities. However, it is our policy to allocate trades in a fair and equitable manner so that accounts are not preferred or disadvantaged over time.” Further, Tortoise is a fee-based firm, as certain advisors may be registered representatives of a broker-dealer and earn commissions for selling or marketing private funds that Tortoise also manages.

While both performance-based fees and securities commissions create the potential for conflicts of interest, the firm is bound by fiduciary duty to always act in its clients best interests.

Tortoise Capital Advisors doesn’t offer financial planning services to its clients, preferring to focus solely on investing and investment management. If you require financial planning services, you can use our financial advisor matching tool to find an advisor in your area better suited to your needs.

Opening an Account With Tortoise Capital Advisors

Tortoise Capital Advisors makes it easy to reach out for an initial meeting. All you have to do is send an email to info@tortoiseadvisors.com or call (913) 981-1020. You can also speak to the client relations team at the firm by calling (913) 890-2132 or sending an email to clientrelations@tortoiseadvisors.com.

All information is accurate as of the writing of this article.

How to Choose a Financial Advisor

  • Finding the right financial advisor that fits your needs might sound easier said than done, but SmartAsset’s free tool can help you find matches in your area in just five minutes. If you’re ready to be set up with local advisors, get started now.
  • When searching for a financial advisor to work with, one of the most important things to pay attention to is whether or not the advisor abides by fiduciary duty. You should also consider whether you're comfortable working with a fee-based firm that has potential conflicts of interest.

How Many Years $1 Million Lasts in Retirement

SmartAsset's interactive map highlights places where $1 million will last the longest in retirement. Zoom between states and the national map to see the top spots in each region. Also, scroll over any city to learn about the cost of living in retirement for that location.

Rank City Housing Expenses Food Expenses Healthcare Expenses Utilities Expenses Transportation Expenses

Methodology To determine how long a $1 million nest egg would cover retirement costs in cities across America, we analyzed data on average expenditures for seniors, cost of living and investment returns.

First, we looked at data from the Bureau of Labor Statistics (BLS) on the average annual expenditures of seniors. We then applied cost of living data from the Council for Community and Economic Research to adjust those national average spending levels based on the costs of each expense category (housing, food, healthcare, utilities, transportation and other) in each city. Using this data, SmartAsset calculated the average cost of living for retirees in the largest U.S. cities.

We assumed the $1 million would grow at a real return (interest minus inflation) of 2%. This reflects the typical return on a conservative investment portfolio. Then, we divided $1 million by the sum of each of those annual numbers to determine how long $1 million would cover retirement expenses in each of the cities in our study. Cities where $1 million lasted the longest ranked the highest in the study.

Sources: Bureau of Labor Statistics (BLS), Council for Community and Economic Research