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Zacks Investment Management Review

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Zacks Investment Management

Zacks Investment Management is a Chicago-based financial advisor firm with $4.77 billion in assets under management. The research-driven firm is an offshoot of the well-known independent research firm, Zacks Investment Research. It has a relatively small team of 11 financial advisors on staff.

Zacks Investment Management primarily works with individual investors, with an emphasis on individuals who don’t have a high net worth. Additionally, the firm provides investment management services to pension and profit-sharing plans, pooled investment vehicles, investment companies and other investment advisors. Zacks typically requires a $500,000 account minimum for its traditional investment advisory services; its robo-advisory program has a lower minimum of $5,000.

Zacks Investment Management Background

Zacks Investment Management's roots date back to 1978, when quantitative equity analyst Leonard Zacks founded Zacks Investment Research. Zacks Investment Management, which was formally established in 1992, is a wholly owned subsidiary of the well-known research firm that provides data and analysis to investment professionals.

Many of Leonard Zacks' ideas shape Zacks Investment Management's strategies and philosophies, including its policy of using of earnings estimates to pick stocks and its proprietary stock-ranking model. The firm itself also heavily values research when making investment decisions, and it has a team of PhDs on staff dedicated to making proprietary quantitative models and studying academic articles.

What Types of Clients Does Zacks Investment Management Accept?

The majority of Zacks Investment Management's clients are individual investors. The firm works with both individuals and high-net-worth individuals, though it serves a majority of the former. Additionally, Zacks offers investment management services to trusts, estates, pension and profit-sharing plans, investment companies, public and private pooled investment vehicles and other corporations or business entities.

Separately from its investment management services, Zacks offers its investment strategies to other investment professionals to utilize. Its client base for this portion of the business, which it refers to as its wholesaling business, includes third-party brokerage firms, registered investment advisors and independent broker-dealers.

Zacks Investment Management Minimum Account Sizes

Zacks Investment Management generally requires a minimum investment of $500,000 for its traditional investment advisory services. This minimum applies to both its wealth management program accounts and its individual fixed-income securities accounts.

However, Zacks also offers a robo-advisory program for individuals with less to invest. The minimum investment required to open a Zacks Advantage account is $5,000.

Services Offered by Zacks Investment Management

Zacks Investment Management primarily provides discretionary investment management. It offers clients the choice of 16 strategies in its wealth management program, which is focused on asset allocation. Clients interested in an alternative approach to investing have the choice of four alternative investments strategies. Additionally, the firm has an online investment advisory program, Zacks Advantage.

In order to meet clients' financial planning needs, Zacks may use the services of other unaffiliated firms.

Zacks Investment Management Investment Philosophy

Zacks Investment Management's investment philosophy is centered on Zacks Rank, a proprietary stock-ranking model developed by Len Zacks, Zacks Investment Research founder. This stock selection model is based on trends in earnings estimate revisions and earnings surprises. Relying on this model as well as its own research, software, other models and databases, Zacks creates customized portfolios comprised of stocks and bonds entirely in-house. Zacks says this unique blend of techniques is intended to offer "enhanced diversification and risk control." Because all research and strategies are in-house, Zacks claims this results in greater transparency and lower fees.

Zacks offers a number of different investing strategies. Notably, five of Zacks' investment strategies are currently ranked in the top 7% by Morningstar. The firm will determine which strategies are appropriate for your portfolio based on a number of factors, including your goals, risk tolerance and time horizon. Once that's determined, a member of Zacks' investment committee will create your portfolio using the firm's models and satellite strategies, which are supported by Zacks Investment Research's insights. The firm actively manages client portfolios and monitors strategies on a daily basis, again using data from Zacks Investment Research as a resource.

Fees Under Zacks Investment Management

Zacks Investment Management charges the following asset-based fees for its wealth management program. This fee schedule applies to all investment strategies except for the Global Tactical Strategy, Premier Select Strategy and Zacks Strategies Direct, which have different fee rates.

Assets Fee Schedule
Up to $500,000 1.80%
$500,000 - $1,000,000 1.65%
$1,000,000 -$1,500,000 1.50%
$1,500,000 - $2,000,000 1.45%
$2,000,000 - $2,500,000 1.35%
$2,500,000 - $3,000,000 1.30%
$3,000,000 - $3,500,000 1.25%
$3,500,000 - $4,000,000 1.20%
$4,000,000 - $4,500,000 1.15%
$4,500,000 - $5,000,000 1.10%
$5,000,000 - $10,000,000  1.05%
More than $10,000,000 1.00%

Wealth management clients who have individual fixed-income securities, including treasury, corporate and municipal bonds, will also pay the following asset-based fees:

Assets Fee Schedule
$500,000 - $2,000,000 0.65%
$2,000,000 - $4,000,000 0.50%
$4,000,000 - $6,000,000 0.40%
More than $6,000,000 0.25%

Additionally, wealth management program clients who use the online-broker-dealer FOLIOfn Investments will owe an annual, fixed account administration fee and may also be charged for certain transactions and trades.

In addition to asset-based fees and other costs, Zacks Investment Management charges performance-based fees to certain qualified clients. These fees will be based either on the account's total return or the amount by which it surpassed a benchmark. Fee rates will be negotiated based on a number of factors, including the amount of assets under management, how long a client has had the account and the client's investment guidelines. Zacks says these fees will not be more than 20% of an account's total return over the period of a year.

The above fee schedules are only for the firm's retail wealth management program. Zacks has different fee schedules for its online investment advisory program, Zacks Advantage, and for institutional clients.

What to Watch out For

Prospective clients should be aware that Zacks Investment  Management is mainly focused on investment management. Though Zacks can meet clients’ financial planning needs, it may rely on financial planning services provided through unaffiliated firms to do so.

Also note that Zacks does charge performance-based fees to certain clients. As these fees are based on how well a portfolio performs, they may incentivize advisors to take more risks in an effort to increase portfolio performance.

Disclosures

Zacks Investment Management has not been subject to any disciplinary actions by regulators over the past decade.

Opening an Account With Zacks Investment Management

To find out more about working with Zacks Investment Management, go to the firm's website and click the green “Contact” button in the top right hand corner. There you can find the email addresses and phone numbers for each of the firm's investment advisors as well as the private client group's executive director.

There's also the option to send Zacks Investment Management a message and have the firm follow up with you. Simply fill out the form with your name, email address, phone number and a message.

Where Is Zacks Investment Management Located?

Zacks Investment Management is based in Chicago, where it ranks No. 5 on SmartAsset’s list of the top 10 Chicago financial advisor firms. The firm’s office is located downtown on West Monroe Street between South Franklin Street and South Wells Street.

Investing Tips

  • Finding the right financial advisor that fits your needs doesn’t have to be hard. SmartAsset’s free tool matches you with financial advisors in your area in 5 minutes. If you’re ready to be matched with local advisors that will help you achieve your financial goals, get started now.  
  • Figure out how much you’re comfortable and can afford to take on. This will help you figure out the optimal asset allocation to balance risk and reward. A conservative investor may want to primarily invest in cash and bonds, while a very aggressive investor may be comfortable heavily investing in equities.

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 cost of living in retirement there.

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

Methodology SmartAsset calculated the average cost of living for retirees in the largest U.S. cities. Using that calculation, we determined how many years $1 million would last in retirement in each major city.

First, we looked at data from the Bureau of Labor Statistics (BLS) on the average annual expenditures of seniors throughout the country. 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.

We assumed the $1 million would grow at a real return (interest minus inflation) of 2%, reflecting the typical return on a conservative investment portfolio. Finally, we divided $1 million by the sum of each of those annual numbers to determine how long $1 million would last in each of the cities in our study.

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