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Verdence Capital Advisors Review

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Verdence Capital Advisors, LLC

Verdence Capital Advisors is an independent advisor firm headquartered in Hunt Valley, Maryland. Since becoming a registered advisor in July 2017, the firm has grown to have more than $1.51 billion in assets under management (AUM). Its team of 16 financial advisors works with nearly 1,000 clients. The firm serves multiple types of clients, but most are individuals. It offers a number of financial planning, consulting and investment management services.

Verdence Capital Advisors Background

Leo J. Kelly III founded Verdence Capital Advisors in 2017. Kelly continues to serve the company in multiple capacities. In addition to being a partner and the principal owner, he is the CEO and a co-CIO. He is also a certified financial planner (CFP) and a certified business exit consultant (CBEC).

Before founding Verdence, Kelly was the CEO of the firm Kelly Wealth Management, which was part of HighTower Advisors, LLC. Verdence is an independent advisor firm.

What Types of Clients Does Verdence Capital Advisors Accept?

Clients of Verdence Capital Advisors include individuals both with and without a high net worth. The majority of the firm’s individual clients do not have a high net worth, however. Types of clients the firm works with vary from families to people who work in entertainment and sports. In addition to individual investors, the firm serves business entities, pension and profit-sharing plans, trusts, estates and charitable organizations.

The firm can work with clients in Arizona, California, Colorado, Delaware, the District of Columbia, Florida, Georgia, Louisiana, Maryland, Massachusetts, Michigan, New Hampshire , New Jersey, New York, North Carolina, Pennsylvania, South Carolina, Tennessee, Texas, Virginia and West Virginia.

Verdence Capital Advisors Minimum Account Sizes

Verdence Capital Advisors generally requires a minimum annual fee of $10,000. The annual fee is calculated as a percentage of AUM. The exact rate is negotiable and varies by client, which means the level of assets you’ll need to work with the firm will also vary. Typically, Verdence charges clients at a rate of 1.50% of AUM or less.

Services Offered by Verdence Capital Advisors

Verdence offers portfolio and investment management, as well as various financial planning and consulting services. Services available include the following:

  • Business exit and other liquidity event planning
  • Corporate executive planning services
  • Estate planning
  • Family planning
  • Tax planning
  • Insurance planning
  • Philanthropy planning
  • Education planning
  • Investment planning and management

Verdence Capital Advisors Investment Philosophy

When determining which investments to use in a client’s portfolio, Verdence Capital Advisors uses multiple methods of analysis. Common methods include fundamental analysis, technical analysis and cyclical analysis. Fundamental analysis focuses on the intrinsic value of an asset, while technical analysis looks at the markets to find patterns in prices of similar assets and to examine investor behavior. Cyclical analysis considers historical relationships between asset price and market trends in order to forecast the direction of asset prices.

Advisors may make investments for both the long term (investments held for more than one year) and the short term (investments held for less than one year). However, the types of assets used in a client portfolio are primarily mutual funds, individual stocks and bonds. Advisors will use those (and sometimes other) asset types in a way that provides the client with an appropriate asset allocation. The exact allocation will depend on a client’s investment objectives and situation.

Fees Under Verdence Capital Advisors

Verdence Capital Advisors’ fees will depend on the services you receive and your level of assets. The firm charges a fixed or hourly fee for stand-alone financial planning and consulting services, including both investment and non-investment matters. The fee is negotiable but typically ranges from $15,000 to $25,000 on a fixed-fee basis, and from $250 to $500 per hour on an hourly basis.

For investment and portfolio management services, the firm charges an annual management fee. The fee is based on a percentage of the client’s AUM. The exact rate is negotiable but usually ranges up to 1.30% of AUM. The client will pay a prorated amount of the the management fee each quarter, in advance, based on the market value of the client’s investments on the last business day of the previous quarter. In the case that a client terminates services, the firm will refund a prorated amount of the fee based on the number of days left in the quarter.

Some clients can also elect to receive their investment management services in the form of a wrap fee program. This is a program where the firm bundles all of the investment and portfolio management costs into a single fee. There is no significant difference in how Verdence handles investments that are or are not in a wrap fee program. It is worth nothing, though, that clients may pay more to take part in the wrap fee program because more costs go into calculating the fee. While the firm’s standard management fee ranges up to 1.30%, the management fee for a wrap fee program usually caps at 1.50%.

To get an idea of how the fees from Verdence compare, check out the table below. The fee estimates are for investment management services with Verdence and assume a fee rate of 1.30%, the maximum rate Verdence may charge. The actual fee you pay may vary. Note that the fee estimates from other firms may also vary depending on various factors.

Estimated Fee Comparison*
Your Assets Verdence Capital Advisors** National Median Advisory Fees***
$500K $6,500 $5,000
$1MM $13,000 $8,500 - $10,000
$5MM $65,000 $25,000 - $32,500
$10MM $130,000 $50,000
*Fee estimates only consider the maximum base fees for the services each firm provides. You may also pay manager fees and other fees, which can vary in amount.  **These estimates are based on Verdence Capital Advisors’ estimated maximum fee of 1.30%. The fee is negotiable and may vary by client.  ***All figures are based on median fee levels according to Bob Veres' 2017 Planning Profession Fee Survey. The above estimates solely take into account AUM-only fees. Total costs will likely be higher due to additional expenses.

What to Watch Out For

Verdence Capital Advisors and its advisors have a fiduciary duty to act in the best interests of their clients. At the same time, it’s worth noting that the firm and its advisors do have some potential conflicts of interest that you may encounter when working the firm.

Some of the firm’s advisors may also work as licensed insurance agents. In that capacity, they may earn commissions from selling certain products to clients, which may create a potential conflict of interest.

A potential conflict of interest may also arise related to the firm’s wrap fee program. According to Verdence, most of the investments used in client portfolios are publicly available. In certain circumstances, however, it may cost less for a client to purchase recommended investments independently instead of as part of a wrap fee program with the firm. That means advisors may earn more by managing a client’s assets as part of a wrap fee program.

Disclosures

Verdence has not been subject to any disciplinary action in the past 10 years.

Opening an Account with Verdence Capital Advisors

You can learn more about Verdence Capital Advisors’ services and about opening an account by calling the firm at (410) 472-5380. This is the phone number for the firm’s headquarters in Maryland. If you are interested in working with the firm’s office in Northern Virginia, you can reach that office at (703) 468-2716.

Prefer to reach out online? You can contact an advisor through a contact form provided on the firm’s website, at verdence.com/contact-us/. This form asks you to provide your contact information and provides an area for you to ask any questions you may have.

Where Is Verdence Capital Advisors Located?

Verdence has multiple office locations. Its headquarters is in Hunt Valley, Maryland, just off I-83. You can also find advisors at the firm’s second office location in Vienna, Virginia. If you want to visit either location, you can find the address and phone numbers (including a toll-free number) on the firm’s website at verdence.com/contact-us/.

Tips for Finding a Financial Advisor

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  • Knowing your investing goals can help you to narrow down your advisor search. For example, a person planning their estate may want to work with a different type of advisor than a person who is just starting to invest and wants to start building retirement savings. One way to help you choose an advisor is to look at his or her certifications. Each certification has its own education and experience requirements that an individual must meet before qualifying. There are advisors who specialize in taxes, insurance planning and many other areas of finance.

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.

Least
Most
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