If the average investor is tired of high fee funds with poor performance and ready for more transparency, says
Dan Kiley, the
Retirement Corporation of America hopes to meet that demand. Kiley is founder and CCO of the Cincinnati-based registered investment advisory firm, which has developed the
Money Masters Investment Portfolio to give individual investors access to what it deems the top fund managers -- 10 in stocks, 5 in bonds.
Holders of online "R Accounts," launched Tuesday, will consult with the advisory staff of RCA to settle on a risk/return strategy. RCA will allocate their investments accordingly among funds run by the 15 "masters," chosen for their results over the past decade or more. The proud few?
Ronald Baron of
Baron Funds,
Robert Baker of
Van Kampen Funds,
William Danoff of
Fidelity,
Christopher Davis of
Davis Advisors,
James Drasdo of
American Funds,
David Herro of
Oakmark,
Bill Miller of
Legg Mason,
Brian Rogers of
T. Rowe Price,
John Rogers of
Ariel Capital Management,
Rudolph Younes of
Julius Baer,
Daniel Fuss of
Loomis, Sayles & Co,
Bill Gross of
PIMCO,
Jeffrey Gundlach of
TCW,
Greg Habeeb of
Calvert Group, and
Ken Leech of
Western Asset.
Kiley's concept is one peculiarly well-suited to the post-Spitzer era: RCA emphasizes it accepts no commissions from the funds it's singled out, so the choices are strictly performance based. It's also geared towards a baby boomer market that, Kiley believes, is souring on high fees while the market moves in the other direction. The R Accounts have no minimum balance, no commissions, no transaction fees, and no exit penalties. They have, however, a one-time $195 set-up fee and an annual management fee of 1 percent or less, as well as the fees associated with the underlying funds.
The business model bears certain similarities to the
Masters' Select Funds offered by Orinda, California-based
Litman/Gregory Fund Advisors. Like RCA, Litman/Gregory aims to harness the prowess of top stock-pickers, and there is some overlap between the two firms' ideas of who those are (Davis, Herro, Miller and John Rogers are on both rosters). But Litman/Gregory launched the Masters' Select series as proprietary funds, hiring the pickers as sub-advisors and letting clients handle allocation.
Kiley's spent two decades in the RIA business with
Retirement Capital Advisors, a firm that manages portfolios for high net worth individuals. "Clients would come to us and say, 'It would be great if you could do the same thing for my son or daughter,' " he said. Those comments prompted months of research, which pointed to the conclusion that small-scale investors "don't know where to turn."
In conjunction with Tuesday's launch, RCA released the results of a national
survey compiled by
Rasmussen Reports last month, which found that over a quarter of respondents think it takes $100,000 in personal assets to get access to top-quality financial advice.
In forming the Retirement Corporation of America, Retirement Capital Advisors has partnered with New York-based
Diligent Partners, a tech consulting firm for the financial services industry, and
The Professional Education Institute, a Burr Ridge, Illinois-based education and training firm.
Fidelity is the third-party custodian for the Money Masters portfolio.
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