Empirical Wealth Management
According to its website, Empirical Wealth Management has seven essential tenets that it bases its client-advisor relationships on. These include "coordinated," "disciplined," "anchored in academics," "forward looking," "tax aware," "designed for you" and "transparent."
Empircal Wealth Management has more than $2.6 billion in assets under management (AUM), and it employs 30 financial advisors. The firm's services include holistic financial planning, portfolio management, pension consulting, tax preparation and insurance services. This firm has also secured a spot on SmartAsset's list of the top financial advisors in Seattle.
Empirical Wealth Management Background
Kenneth Smith founded Empirical Wealth Management in 2009. Smith is still the firm's principal owner, but director of financial planning Ethan Broga, chief financial officer (CFO) Lorne Enquist, president and chief wealth strategist Michael Kelly, lead financial advisor Shan Zubair, director of tax and wealth transfer James Jones II and chief marketing technology officer Simon Liu are all minority owners.
The majority of the firm's 30 advisors are certified financial planners (CFPs), but the firm does employ six certified public accountants (CPAs), five chartered financial analysts (CFAs) and more.
Empirical Wealth Management Client Types and Minimum Account Sizes
Empirical Wealth Management primarily works with individuals, with a near even split between high-net-worth and non-high-net-worth individuals. It also provides services to a few charitable organizations, corporations, government entities, retirement plans and pooled investment vehicles.
To become a client of this firm, you'll need at least $1 million in investable assets. The firm reserves the right to waive this requirement, though.
Services Offered by Empirical Wealth Management
Empirical Wealth Management provides holistic planning around several financial needs, including the following:
- Retirement planning
- Pension consulting
- Business planning
- Small business retirement savings strategies
- Tax planning and preparation assistance
- Disability protection
- Stock option and deferred compensation plan strategies
- 401(k) recommendations
- Retirement planning
Empirical Wealth Management Investment Philosophy
Empirical Wealth Management provides investment advisory services based on Modern Portfolio Theory. This philosophy centers around diversified portfolios that deliver optimal returns based on an investor's specific risk tolerance. This means the firm aims to develop portfolios with an asset allocation that has breadth and variety.
The firm typically utilizes anywhere from 12 to 21 different asset classes when building portfolios. The amount devoted to each asset class is driven by the client's risk characteristics and overall investment goals.
The firm tends to invest in mutual funds and exchange-traded funds (ETFs), and it often selects institutional funds or those available only through investment advisors. Other securities the firm invests its clients' assets in include the following:
- Equities
- Investment company securities
- U.S. government securities
- Commercial papers
- Corporate debt
- Municipal securities
- Futures securities
Fees Under Empirical Wealth Management
For fee-based investment advisory clients, Empirical Wealth Management charges management fees based on their AUM. These fees are charged quarterly based on an average daily balance calculation.
Below is the firm’s current general schedule of fees. Since they are charged on a quarterly basis, the annual rate should be broken into fours. These fees are generally deducted from a client's account on the first day of each calendar quarter. For context, RIA in a Box conducted a study in 2018 that showed the average annual advisory fee is 0.95% of AUM.
| Empirical Wealth Management Fees | |
| AUM | Annual Fee |
| First $2MM | 1.00% |
| $2MM - $5MM | 0.80% |
| $5MM - $10MM | 0.70% |
| $10MM - $20MM | 0.50% |
| Above $20M | 0.30% |
Some clients of Empirical may be included in the firm’s wrap-fee program. When it comes to these clients, the firm will charge a comprehensive fee that covers portfolio management, custodial and brokerage services and more.
Below, you can see how Empirical's advisory fees compare on a national scale.
| *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. **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. | ||
| Estimated Fee Comparison* | ||
| Your Assets | Empirical Wealth Management | National Median Advisory Fees** |
| $500K | N/A (below required minimum) | $5,000 |
| $1MM | $10,000 | $8,500 - $10,000 |
| $5MM | $44,000 | $25,000 - $32,500 |
| $10MM | $79,000 | $50,000 |
A performance-based fee framework may come into play if you’re a “qualified client.” Under the Investment Advisers Act of 1940, this generally means someone who has at least $1 million in AUM or a net worth of at least $2 million. Empirical claims it typically requires the latter for this arrangement to commence. The firm would negotiate these fees with the client.
What to Watch Out For
Empirical Wealth Management has reported no disclosures on its latest Form ADV with the SEC. This is a document that all registered firms must submit to keep their status.
Because Empirical Wealth Management has a performance-based fee schedule, it may provide incentive for advisors to recommend riskier investments to try to capture stronger returns and therefore compensation. However, Empirical Wealth Management reports that all supervised persons are fiduciaries. As a result, they are legally required to put the best interests of clients above all else.
Furthermore, this firm employs at least one individual affiliated with Empirical Insurance who is licensed to sell insurance products in certain states. Because this individual receives commissions when selling these products, they may be incentivized to recommend products based on potential compensation. However, this individual and the firm in general must abide by fiduciary duty.
Opening an Account with Empirical Wealth Management
Empirical Wealth Management is based in Seattle, though it also has other offices throughout Washington. It also runs branches in California, Alaska and Oregon. You can stop by any of these offices to discuss opening an account with the firm. In addition, you can call its main customer service line at (800) 923-4307 or email info@empirical.net.
All information is accurate as of the writing of this article.
Tips for Finding The Right Financial Advisor
- Fiduciaries are required by law to act in your best interest. Advisors also have different fee structures. Fee-only certified financial planners (CFPs), for example, don’t make commissions and essentially only make money when you make money.
- Once you’re meeting with financial advisors you may want to work with, it’s important to keep a few things in mind. To help, we published a piece on the five questions to ask when choosing a financial advisor.
