Waddell & Reed, Inc. is a fee-based firm with more than $21 billion in assets under management (AUM) and nearly 2,000 advisors. The Kansas-based financial advisor’s client base totals to nearly 170,000.
Waddell & Reed, Inc. Background
Functioning as a wholly owned subsidiary of Waddell & Reed Financial, Inc., Waddell has provided various advisory services since 1937. The firm was founded by World War I veterans Chauncey Waddell and Cameron Reed. The firm offers its services through almost 400 offices throughout the country.
Waddell & Reed, Inc. Client Types and Minimum Account Sizes
The Kansas-based firm’s client base consists of non-high-net-worth and high-net-worth individuals, pension and profit sharing plans, trusts, estates, charitable organizations, corporations and business entities.
The firm doesn’t specify any minimum account size requirements.
Services Offered by Waddell & Reed, Inc.
Clients with an account under Waddell’s management have access to an array of advisory services, including:
- Portfolio management
- Financial planning
- Pension consulting
- Advisor referrals
- Educational seminar
The firm’s financial planning services also encompass education funding, retirement, goal funding, survivor income needs, disability income, long-term care, estate planning, asset allocation, business planning and income tax planning. In addition, advisors provide financial planning and asset allocation tools, and the firm offers fee-based asset-allocation and wrap fee programs.
Waddell & Reed, Inc. Investment Philosophy
Waddell generally recommends that clients allocate assets across a range of asset classes. The firm’s three key principles include listening, planning and advising. Waddell says on its website that it builds its investment products and services in a way that meets different and specialized client needs.
The firm says it also uses planning tools which can adjust to economic changes, tax laws and life changes.
Fees Under Waddell & Reed, Inc.
At Waddell, financial planning fees are negotiable between advisor and client. The firm determines financial fees based on the complexity of each client’s financial situation. To determine client case complexity, Waddell requires each client to complete a complexity worksheet which is part of the financial planning services agreement. The firm then uses three levels of rating to determine a client’s complexity. The levels of rating include basic, intermediate or advanced complexity.
The maximum amount advisors can negotiate for basic complexity is $2,500, while the maximum fee for the intermediate level is $5,000. Advisors can charge $10,000 at most for clients with advanced complexity.
The firm doesn't list any information about its investment advisory fee schedule.
What to Watch Out For
Advisors offer fee-based, affiliated mutual funds which can earn them commission-based compensation. This can create a conflict of interest if advisors favor these over other investment solutions that would be more suitable to client needs. The firm’s fiduciary duty prevents such conflicts and makes sure advisors work in each client’s best interest.
Waddell also has disclosures that we'll look further into below.
The firm has eight disclosures listed on its Form ADV. Each of the disclosures were related to regulatory violations. Most recently, in 2016 the firm reportedly violated New Hampshire securities law. One of the firm’s investment advisors was found to have verbally misrepresented the financial planning fees he charged to clients. The New Hampshire Bureau of Securities also found Waddell’s supervision of the investment advisor to be deficient.
The firm entered into a consent order and paid a fine of $300,000 to resolve the matter. Waddell also agreed to repay some of the financial planning fees paid by clients of the advisor under investigation.
Opening an Account With Waddell & Reed, Inc.
Waddell offers a few options for getting in touch. Prospective clients looking to open an account can fill out the firm’s contact form, and a firm representative will reach out with answers to any questions you may have. You can also visit any of the firm’s offices, or you can call the firm to speak with an advisor over the phone. You can reach the firm’s main office at (913) 236-2000.
Tips for Investing
- Investing can be a great way to save for retirement. Whether you’re a passive or active investor, you can generate significant returns through practices like portfolio diversification and asset allocation. If you’d like a better picture of how much money your investments can earn you over time, consider using our investment calculator.
- If you’d like professional guidance with your investments, a financial advisor could be right for you. Our free financial advisor matching service will connect you with up to three local advisors within minutes.
All information was accurate as of the writing of this article.