There are many types of financial advisors. Retail advisors that are employed by large Wall Street investment firms. Independent advisors that register as a Registered Investment Advisor with large firms like Schwab, Fidelity, and TD Ameritrade, often charging a fee to advise clients who then invest their clients in third-party mutual funds or ETFs. The industry is mostly made up of those two camps. Linden Thomas & Company founder Stephen Thomas spent the first half of his career as a retail advisor with three of Wall Street's top firms and the last ten years as one of the nation's top independent advisors.
Thomas found the challenge with retail advisors and independent advisors - they charge a fee and then place investors in third-party funds. Then they pool investor's hard earned money and charged hidden fees like trading cost, expense ratios, and spreads on trades. Other disadvantages were that products often carry pricing disadvantages that impact investor results but are seldom detected by the investing public. To change how the client's assets were managed, Thomas had to take the road less traveled and start an Independent Broker-Dealer Investment Firm. This meant more federal licensing requirements under the Securities Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA) and meant incurring costs and building a team. By doing so, it opened the door for the team at Linden Thomas & Company to gain the independence needed to build portfolios directly for clients that meet requirements.
What's the benefit of direct asset management?
With independence, Linden Thomas & Company Institutional Direct allows their clients to get direct access to private portfolios tailored to each client's specific needs. This is unlike most investment firms where advisors charge a fee of 1.0-2.0% and then Invest in third-party products with additional fees. Linden Thomas & Company manages the money directly in separately managed accounts or institutional direct accounts. The benefits include significant cost savings to each investor, total transparency, and control. Other benefits include tax efficiency, gifting of appreciated holdings, and reduced pricing disadvantages
Old Model (pooled with advisor fee)
New Model (Institutional Direct)
Institutional Direct means each investor has direct access to the institutional manager, Linden Thomas & Company. This gives each investor cost savings, individual stocks, and bonds in private portfolios managed directly so investors have total control.
"What investors gain by Institutional Direct is what they deserve!"
~ Stephen L. Thomas