Index Fund Advisors

Last updated
Index Fund Advisors
Company type Private
Industry Finance
FoundedMarch 5, 1999
Headquarters Irvine, California, USA
Key people
Mark Hebner
Products Registered Investment Advisor
Website www.ifa.com

Index Fund Advisors (IFA) is a registered investment advisor (RIA) headquartered in Irvine, California, with representatives in several locations across the United States. The company was founded on March 5, 1999, by Mark T. Hebner, [1] former president of nuclear pharmacy company Syncor International, with the goal of providing online automated investment adviser services, with a personal touch as needed, while also providing educational material regarding investing to the general public through the website IFA.com. [2] [3]

Contents

IFA offers high-net-worth individuals, 401k plans, 403b plans, foundations, and endowments of an expanding range of advisory services that are consistent with IFA's investment strategy of passive management. Heavily influenced by the works of Nobel Laureates Eugene Fama, Harry Markowitz, Paul Samuelson, William F. Sharpe, Merton Miller, Daniel Kahneman and Friedrich von Hayek, IFA advises clients to invest in low-cost index mutual funds, such as those provided by Dimensional Fund Advisors, Vanguard or Blackrock's iShares. Additionally, IFA offers advice on faith-based and sustainable investments, through its IFAsustainable.com and InvestingforCatholics.com sites. [4]

IFA pioneered the idea of the Robo-Advisor when it first published their website on November 9, 1999, as indexfundsadvisors.com, then IFA.tv and finally as IFA.com.[ citation needed ] Mark Hebner pioneered the business model of a low-cost online Registered Investment Adviser which would provide an online algorithm-based risk capacity survey designed to match individual investors with one of several index portfolios. These portfolios have always been implemented exclusively with index funds. The process of becoming an IFA client has not required face to face meetings and there has been minimal human intervention. IFA was among the first RIAs to offer an online live advisor camera (streaming video and NetMeeting) and live chat. Since 1999, IFA clients have been offered portfolio rebalancing, tax loss harvesting, tax-management, asset location, extensive online education and historical index and index portfolio risk and return data. [5]

In 2012, IFA built its own in-house TV studio and produces videos that are published on iTunes, YouTube, Roku, and IFA.tv (352 videos as of August 2016). One of the world's largest private collections of financial books can be found at IFA, with about 2,494 books dating back to 1648. The books are catalogued and displayed on IFA.com.

Mark Hebner is also the author of Index Funds: The 12-Step Recovery Program for Active Investors, a book on behavioral finance, the failure of active management and the advantages of passive investing. The book was first published in 2005 and its latest update was published in 2015. [6] Together these various media endeavors advance Hebner's mission to get investors all over the world to stop actively investing their investment portfolios.

IFA's investing philosophy is based on Nobel prize-winning academic and empirical research, including the efficient-market hypothesis, multi-factor asset pricing models, such as the Fama-French Three-Factor Model and more generally modern portfolio theory. IFA rejects the investment strategies generally known as active management. These strategies include stock picking, market timing, manager selection and tactical asset allocation.

In 2015, they had annual growths of more than 18% in assets under management reaching $2.71 billion by the end of June. [7] [8] In March of 2015, Wesley Long became executive vice president and director of wealth advisor services at IFA. [9] [10]

In February 2016, IFA opened a new office in Austin, Texas, managed by Derick Kann. [11] [12] [13]

IFA reached $3.84 billion in assets under management on 12/31/2017. According to Forbes, IFA was one of the 100 fastest growing RIA Firms, in 2016. [14]

In August 2023 IFA announced that Mark J. Higgins became the Senior Vice President and Institutional Advisor. [15] As of June 2023, the IFA had about $4.71 billion in assets under management. [15] As of January 2024, they managed $4.4 billion in assets. [16]

Awards

In 2015, IFA was listed on Forbes’ 2015 list of Top Wealth Managers as well as Financial Advisors Magazine’s RIA Survey ranking 80th in the list of 562. [7] [8]

In 2021, IFA was awarded the Top 150 RIA Leaders award from Financial Planning. [17] [18]

They received the Financial Advisors Magazine award for Top RIAs in 2022. [17] [3]

In 2023, the IFA received position 83 in the CNBC Top 100 Financial Advisors [19] [3] and Mark Hebner received Barron’s Top Financial Advisors in California award. [3] [17]

See also

Related Research Articles

Passive management is an investing strategy that tracks a market-weighted index or portfolio. Passive management is most common on the equity market, where index funds track a stock market index, but it is becoming more common in other investment types, including bonds, commodities and hedge funds.

An index fund is a mutual fund or exchange-traded fund (ETF) designed to follow certain preset rules so that it can replicate the performance ("track") of a specified basket of underlying investments. While index providers often emphasize that they are for-profit organizations, index providers have the ability to act as "reluctant regulators" when determining which companies are suitable for an index. Those rules may include tracking prominent indices like the S&P 500 or the Dow Jones Industrial Average or implementation rules, such as tax-management, tracking error minimization, large block trading or patient/flexible trading strategies that allow for greater tracking error but lower market impact costs. Index funds may also have rules that screen for social and sustainable criteria.

An exchange-traded fund (ETF) is a type of investment fund that is also an exchange-traded product, i.e., it is traded on stock exchanges. ETFs own financial assets such as stocks, bonds, currencies, debts, futures contracts, and/or commodities such as gold bars. Many ETFs provide some level of diversification compared to owning an individual stock.

The Vanguard Group, Inc. is an American registered investment advisor based in Malvern, Pennsylvania, with about $7.7 trillion in global assets under management, as of April 2023. It is the largest provider of mutual funds and the second-largest provider of exchange-traded funds (ETFs) in the world after BlackRock's iShares. In addition to mutual funds and ETFs, Vanguard offers brokerage services, educational account services, financial planning, asset management, and trust services. Several mutual funds managed by Vanguard are ranked at the top of the list of US mutual funds by assets under management. Along with BlackRock and State Street, Vanguard is considered to be one of the Big Three index fund managers that play a dominant role in corporate America.

An institutional investor is an entity that pools money to purchase securities, real property, and other investment assets or originate loans. Institutional investors include commercial banks, central banks, credit unions, government-linked companies, insurers, pension funds, sovereign wealth funds, charities, hedge funds, real estate investment trusts, investment advisors, endowments, and mutual funds. Operating companies which invest excess capital in these types of assets may also be included in the term. Activist institutional investors may also influence corporate governance by exercising voting rights in their investments. In 2019, the world's top 500 asset managers collectively managed $104.4 trillion in Assets under Management (AuM).

Investment management is the professional asset management of various securities, including shareholdings, bonds, and other assets, such as real estate, to meet specified investment goals for the benefit of investors. Investors may be institutions, such as insurance companies, pension funds, corporations, charities, educational establishments, or private investors, either directly via investment contracts/mandates or via collective investment schemes like mutual funds, exchange-traded funds, or Real estate investment trusts.

<span class="mw-page-title-main">PIMCO</span> US global investment management firm

Pacific Investment Management Company, LLC is an American investment management firm focusing on active fixed income management worldwide. PIMCO manages investments in many asset classes such as fixed income, equities, commodities, asset allocation, ETFs, hedge funds, and private equity. PIMCO is one of the largest investment managers, actively managing more than $2 trillion in assets for central banks, sovereign wealth funds, pension funds, corporations, foundations and endowments, and individual investors around the world. According to the Sovereign Wealth Fund Institute, PIMCO is the 6th-largest asset manager in the world by managed AUM.

Active management is an approach to investing. In an actively managed portfolio of investments, the investor selects the investments that make up the portfolio. Active management is often compared to passive management or index investing.

In finance, assets under management (AUM), sometimes called fund under management, measures the total market value of all the financial assets which an individual or financial institution—such as a mutual fund, venture capital firm, or depository institution—or a decentralized network protocol controls, typically on behalf of a client. Funds may be managed for clients, platform users, or solely for themselves, such as in the case of a financial institution which has mutual funds or holds its own venture capital. The definition and formula for calculating AUM may differ from one entity to another.

<span class="mw-page-title-main">Bridgewater Associates</span> U.S. based investment management firm

Bridgewater Associates, LP is an American investment management firm founded by Ray Dalio in 1975. The firm serves institutional clients including pension funds, endowments, foundations, foreign governments, and central banks. As of 2022, Bridgewater has posted the second highest gains of any hedge fund since its inception in 1975. The firm began as an institutional investment advisory service, graduated to institutional investing, and pioneered the risk parity investment approach in 1996.

<span class="mw-page-title-main">Financial adviser</span> Professional who renders financial services to clients

A financial adviser or financial advisor is a professional who provides financial services to clients based on their financial situation. In many countries, financial advisors must complete specific training and be registered with a regulatory body in order to provide advice.

<span class="mw-page-title-main">T. Rowe Price</span> American publicly owned investment firm

T. Rowe Price Group, Inc. is an American publicly owned global investment management firm that offers funds, subadvisory services, separate account management, and retirement plans and services for individuals, institutions, and financial intermediaries. The firm has assets under management of more than $1.51 trillion and annual revenues of $6.48 billion as of 2023, placing it 537 on the Fortune 1000 list of the largest U.S. companies. Headquartered at 100 East Pratt Street in Baltimore, Maryland, it has 7,868 employees across 17 international offices serving clients in 55 countries.

Dimensional Fund Advisors, L.P. is a privately-owned investment firm headquartered in Austin, Texas. Dimensional was founded in Brooklyn in 1981 by David Booth, Rex Sinquefield and Larry Klotz. The company has affiliates within 15 offices in the U.S., Canada, U.K., Germany, Netherlands, Australia, Singapore, and Japan. Dimensional maintains additional U.S. offices in Charlotte, North Carolina and Santa Monica, California.

Partners Group Holding AG is a Swiss-based global private equity firm with US$147 billion in assets under management in private equity, private infrastructure, private real estate and private debt.

AdvisorShares Investments is a US-based investment management firm based in Bethesda, Maryland which offers actively managed exchange-traded funds (ETFs) through the AdvisorShares Trust. AdvisorShares partners with third party financial advisers who already manage clients’ assets to package their investment strategy using exchange-traded funds. As part of promoting its funds it also provides educational support to help financial advisors and investors understand actively managed ETFs and their underlying investment strategies.

A quantitative fund is an investment fund that uses quantitative investment management instead of fundamental human analysis.

Betterment is an American financial advisory company which provides digital investment, retirement and cash management services.

Robo-advisors or robo-advisers are a class of financial adviser that provide financial advice and investment management online with moderate to minimal human intervention. They provide digital financial advice based on mathematical rules or algorithms. These algorithms are designed by financial advisors, investment managers and data scientists, and coded in software by programmers. These algorithms are executed by software and do not require a human advisor to impart financial advice to a client. The software utilizes its algorithms to automatically allocate, manage and optimize clients' assets for either short-run or long-run investment. Robo-advisors are categorized based on the extent of personalization, discretion, involvement, and human interaction.

<span class="mw-page-title-main">Wealthfront</span> Automated investment service firm

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<span class="mw-page-title-main">CI Financial</span> Largest investment management firm by assets under management in Canada

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References

  1. ↑ "Index Fund Advisors opens new office in Austin". Private Banker International. 2016-02-22. Retrieved 2024-03-18.
  2. ↑ "Index Fund Advisors opens new office in Austin". Private Banker International. 2016-02-22. Retrieved 2024-03-18.
  3. 1 2 3 4 "Index Fund Advisors Review | SmartAsset.com". SmartAsset. 2023-07-20. Retrieved 2024-03-18.
  4. ↑ "The story behind Index Fund Advisors | TEBI". The Evidence-Based Investor. 2020-09-22. Retrieved 2024-04-09.
  5. ↑ "Index Fund Advisors Review | SmartAsset.com". SmartAsset. 2023-07-20. Retrieved 2024-04-09.
  6. ↑ Hebner, Mark T.; Markowitz, Harry M. (2012-03-15). Index Funds: The 12-Step Recovery Program for Active Investors. IFA Publishing, Inc. ISBN   978-0-9768023-1-0.
  7. 1 2 "Orange County's Index Fund Advisors Ranks 80th on FA Magazine's RIA Rankings and 71st on Forbes Top 100 Wealth Managers". Yahoo Finance. 2015-07-21. Retrieved 2024-05-29.
  8. 1 2 "Index Fund Advisors Review | SmartAsset.com". SmartAsset. 2023-07-20. Retrieved 2024-05-29.
  9. ↑ "ON THE MOVE-Ex-Wedbush private client head joins Index Fund Advisors". Reuters. Retrieved 2024-05-29.
  10. ↑ "Advisors on the Move: Morgan Stanley Loses $750M Team". Financial Planning. 2015-04-13. Retrieved 2024-05-29.
  11. ↑ "California RIA Opens Doors In Texas". www.familywealthreport.com. Retrieved 2024-05-31.
  12. ↑ "Index Fund Advisors Expands National Presence With Appointment Of Derick Kann, CFP(R) and Launch of Austin Location". Yahoo Finance. 2016-02-18. Retrieved 2024-05-31.
  13. ↑ Staff, Verdict (2016-02-22). "Index Fund Advisors opens new office in Austin". Private Banker International. Retrieved 2024-05-31.
  14. ↑ Cooling, Julie. "100 Fastest Growing RIA Firms Over Ten Years". Forbes. Retrieved 2017-10-04.
  15. 1 2 "Index Fund Advisors (IFA) Hires Former Senior Investment Consultant to Drive Expansion of Institutional Investment Plan Business". www.prnewswire.com. Retrieved 2024-06-05.
  16. ↑ "Index Fund Advisors Review 2024". investor.com. Retrieved 2024-06-05.
  17. 1 2 3 "Index Fund Advisors, Inc. (IFA.COM)". www.ifa.com. Retrieved 2024-06-14.
  18. ↑ "Index Fund Advisors Review | SmartAsset.com". SmartAsset. 2023-07-20. Retrieved 2024-06-14.
  19. ↑ "83. Index Fund Advisors". CNBC. 2023-09-12. Retrieved 2024-06-18.
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