Wellington Management Company, LLP is a financial advisory firm headquartered in Boston, Massachusetts. The firm’s client base is quite wide-ranging, including individuals, investment funds, retirement plans, businesses, insurance companies and more.
This is a fee-only firm, meaning it earns income exclusively from the fees that its clients pay. This differentiates it from a fee-based firm, which can also earn compensation from commission-based sources like insurance sales or security transactions.
Wellington Management Company Background
Wellington Management Company was founded way back in 1928. Although Boston is its home, the firm does business around the U.S. and the world, acting as an advisor for clients in more than 50 countries. The firm is owned by many partners, none of whom hold more than 5% of the firm’s shares.
The firm employs a massive team of advisors who are spread throughout its various branches. Many of these advisors have earned professional certifications, such as chartered financial analyst (CFA) or chartered alternative investment analyst (CAIA).
Wellington Management Company Client Types and Minimum Account Sizes
Wellington Management Company has over a thousand clients, of which pooled investment vehicles take up the largest share, followed closely by pension plans and insurance companies. The remaining clients are a mix of high-net-worth individuals, banking institutions, investment companies, charitable organizations, government entities, investment advisors, sovereign wealth funds and businesses.
According to Wellington Management Company’s Form ADV, the firm imposes varying account minimums that depend on the investment strategy you go with. These can range anywhere from $25 million to $300 million, though the firm may waive or lower an account minimum or impose a minimum fee, at its discretion. If you're unable to work with Wellington due to its high account minimum, you can find another advisor in your area with a more attainable minimum investment amount.
Services Offered by Wellington Management Company
The primary offering at Wellington Management Company is its investment management service. Some of the funds that Wellington advises are also sponsored by the firm. Wellington may also provide clients with non-discretionary investment advice on a limited basis.
Additionally, the firm occasionally provides wrap fee program sponsors with proprietary portfolio models. Wellington’s investment management and advice are powered by the firm’s extensive in-house research team and system.
Wellington Management Company Investment Philosophy
The investment approach at Wellington Management Company depends heavily on the specific investment strategy or strategies that are chosen for your portfolio. The firm has a catalog of strategies that can focus on either a single asset class or multiple asset classes at once.
Equity strategies can be centered around specific market capitalization ranges. The firm also employs widespread global diversification that may adhere to a certain geographic region or industry sector. If your portfolio calls for it, the firm may expand its investments to cover multiple regions or sectors.
The firm also uses investment strategies that zero in on fixed-income securities, currencies, commodities or a combination of asset classes.
Fees Under Wellington Management Company
Wellington typically charges its clients a percentage-based fee for its investment management services. However, the exact percentage clients may pay will vary based on factors such as investment strategy, account size, services and more. Consequently, the firm doesn’t have a standard, “one-size-fits-all” fee schedule and keeps their fees as discretionary as legally allowed.
When it comes time to charge fees, Wellington will base them on your account’s quarter-end market value or the average value for the quarter. These are payable in arrears.
What to Watch Out For
Wellington Management Company has several disclosures listed on its Form ADV. Three are associated directly with the firm, while the others are related to an advisory affiliate. All three of Wellington’s direct disclosures are from foreign financial authorities, including the Financial Supervisory Authority of Norway, BaFin (Germany’s financial regulatory authority) and the Swedish Financial Supervisory Authority.
The firm may receive performance-based fees from certain clients. As the firm’s Form ADV states, “Many portfolio managers and other investment personnel have responsibility for client accounts with performance-based fees, as well as for accounts with asset-based fees.
Strong investment returns increase the performance-based fee paid to us as a firm and the incentive compensation paid to the portfolio manager. As a result, we have an incentive, particularly in the case of hedge funds, to favor an account with a performance-based fee.” Regardless, the firm abides by fiduciary duty, legally binding it to act in clients’ best interests.
Opening an Account With Wellington Management Company
There are a few different ways you can get in touch with Wellington Management Company. You can call the firm over the phone or you can visit the firm’s website and fill out the contact form with your name, company, email address and message.
All information is accurate as of the writing of this article.
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