Bernstein Private Wealth Management is the boutique private wealth management arm of AllianceBernstein LP, a prominent global investment firm with $759 billion in assets under management (AUM). The private wealth division serves affluent individuals, families, foundations and others. Its teams of analysts across the world engage in comprehensive proprietary research. The firm generally requires high account minimums.
The bottom line: Bernstein Private Wealth Management is an arm of global investment firm AllianceBernstein, and serves largely deep-pocketed clients using a mix of tailored strategies.
|Assets under management: Approximately $120 billion|
|Minimum investment: Typically $1 million for private clients|
|Individual investor to advisor ratio: N/A|
|Fee structure: A percentage of AUM, fixed fees, performance-based fees|
|Headquarters: 1345 Avenue of the Americas
New York, NY 10105
Phone: (212) 969-1000
All information included in this profile is accurate as of December 20, 2021. For more information, please consult Bernstein Private Wealth Management’s website.
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Bernstein Private Wealth Management manages roughly $120 billion in assets for affluent individuals, families, endowments, foundations and other financial guardians. Today, it’s a unit of AllianceBernstein L.P., or AB, one of the largest investment firms in the world.
Thus, advisors who work with private wealth clients are actually employees of AllianceBernstein. In total, AllianceBernstein has more than 2,000 workers in investment advisory and research roles. To distinguish itself from other wealth advisors, the Bernstein unit leans on this relationship, and its access to AB research and its bench of in-house research analysts.
AllianceBernstein was created in 2000 through the combination of private investment manager Sanford Bernstein & Co. and Alliance Capital Management Corporation. But it didn’t change its name to AllianceBernstein until 2006, and it changed its branding to AB in 2015. In 2018, it announced it was moving its corporate headquarters from New York to Nashville, Tennessee. The private wealth group remains in New York.
In general, it’s clients with deep pockets that turn to Bernstein Private Wealth Management. Clients include:
Individuals who work with the firm may be planning for a certain event, such as selling a company or an IPO, or want guidance on philanthropic giving or passing wealth to future generations.
The minimum investment needed for private clients to work with the firm is generally $1 million. To invest in alternative asset strategies, such as hedge funds, clients usually must be willing to commit at least $500,000.
Clients with portfolios larger than $25 million are typically considered institutional investors and handled in a different division of AllianceBernstein. Parent company AB consists of separate retail and institutional investor divisions to serve institutions as well as retail clients with more modest portfolios.
The firm focuses primarily on investing, with the goal of preserving the necessary amount of capital and growing the rest. Your personal advisor will not manage your money, but rather work with a team of tax, estate and trust attorneys and CPAs to create a custom plan for you. Clients can implement their custom plan using separately managed accounts, mutual funds, hedge funds and other investment vehicles. Most clients sign up for discretionary management, meaning they don’t need to approve each trading decision.
Here is a comprehensive list of services offered by Bernstein Private Wealth Management:
Families interested in environmental and societal outcomes can choose to invest in standalone ESG-focused portfolio options. Families can also receive education on living with substantial means through family meetings, family philanthropy and the development of investment policy statements.
For most private clients, AB provides the investment management services, while the firm’s broker-dealer subsidiary, Bernstein LLC, provides custody services and order execution for equities. Clients appoint AB and Bernstein to perform their respective services.
Bernstein touts that what makes it unique from other asset managers is its access to the research services from the larger AB. The latter’s roughly 300 research analysts around the world — who often have work experience in the industries they cover — provide portfolio managers with insight on specific companies and industries. Portfolio managers also may conduct their own due diligence.
Given how much they value research, Bernstein recommends actively managed portfolios in most cases. However, the firm will work with both active and passive accounts.
Portfolio managers use strategies such as long- and short-term purchases, trading, short sales, options, arbitrage and more. Some portfolios are long trades only, while others include short sales as well.
To create your customized plan, and decide which strategies to invest in, you’ll discuss with your advisor factors such as your:
Your team will then create an asset allocation and run various scenarios based on past returns, volatility and valuations that will determine your hypothetical range of future wealth. Your advisor can then determine what percentage of your portfolio should be allocated to preservation versus growth.
Ultimately, your plan may focus on a single investment strategy, such as growth equities or fixed income high-yield investing, or use a blend of many approaches. Investment strategies can include one or many of the following:
Bernstein Private Wealth Management is transparent with its fee schedule, but actually determining how much you’ll pay may be difficult to assess ahead of time. That’s because your fees depend on how your assets are invested. In addition, portfolios of between $1 million and $5 million will owe a 0.25% administrative and servicing charge on the first $3 million of assets. Portfolios over $5 million will not be charged this fee.
Be aware that if you withdraw funds and your portfolio value falls below $1 million, your fees could spike, reaching an all-inclusive annual 1.85% on the first $500,000, and 1.50% on the next $499,999. Keep in mind that this covers all investment management, servicing, custody, tax management, rebalancing and investment planning changes.
|Fees on Return-Seeking and Diversifying Assets|
|First $1 million||1.25%|
|Next $1 million||1.20%|
|Next $3 million||1.10%|
|Next $5 million||1.05%|
|Next $15 million||0.90%|
|Next $25 million||0.75%|
|Fees on Risk-Mitigating Assets|
|Tax-advantaged and taxable bonds||0.55%|
|Intermediate-duration institutional portfolio||0.45% (minimum $3 million investment)|
As an example, here’s how the total estimated fees may break down for a client who has 60% of their account invested in return-seeking and diversifying assets and the remaining 40% invested in risk mitigating assets:
|Total Estimated Fee* For Accounts with 60% in Return-Seeking & Diversifying Assets and 40% in Risk-Mitigating Assets|
|Assets under management||Total estimated fee|
|$1 million to $3 million||1.21%|
|*Includes investment management fees and administrative and servicing charge where appropriate|
Instead of an asset-based fee schedule, the firm may instead charge a performance-based fee, which is contingent upon portfolio performance. Arrangements can vary depending on the client.
Parent company AB, the actual employer to the Bernstein wealth team team, discloses that while no actions are pending against the firm currently, in the past it has faced regulatory fines for various issues. This includes allegations of not registering employees with regulators, and allowing an employee to act as an advisor before the employee had a state license.
For context, the U.S. Securities and Exchange Commission (SEC) requires investment advisors to disclose in their Form ADV any legal or disciplinary event that is material to a client’s evaluation of the advisory business or the integrity of the management personnel. To learn more, visit the firm’s Investment Adviser Public Disclosure (IAPD) page.
Bernstein Private Wealth Management is headquartered in New York City. AllianceBernstein lists the following additional U.S. office locations on its website:
AB has been a stalwart in the industry for decades. That doesn’t mean, however, that the private wealth arm Bernstein is the right choice for all customers. With a typical minimum portfolio size of $1 million (with some exceptions), investors just starting out or that otherwise lack seven-figure portfolios will likely need to look elsewhere. You may also want to seek out alternatives if you’re looking for more financial planning rather than investing, as Bernstein traditionally has focused more on investment services.
Always ask your advisor how much in total they earn off your account, including commissions from other parties. Also ask why they are recommending one product over another. Whether you’re considering AllianceBernstein or any other advisor, it’s your job to make sure you understand how that advisor is paid and to suss out why they are recommending that particular investment or product. Be sure to research multiple firms to ensure you find the right advisor for you.
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