A. General Description of the Company
Advisor Partners II, LLC (“AP”) (CRD# 321633) succeeded to the advisory business of its predecessor
Advisor Partners, LLC (CRD#114536) in June 2022 and does business under the name of Advisor
Partners. The predecessor’s business was founded in 2001. The advisory services and management
of AP will remain the same and will continue the advisory business of the prior adviser in all respects.
AP, through Pathstone Intermediate Holdings, LLC is wholly owned by Pathstone Holdings, LLC
which is owned by investment vehicles controlled by Kelso & Company (“Kelso”) and by Lovell
Minnick Partners, LLC (“LMP”) as well as certain employees and clients of Pathstone both directly
and indirectly. See our response to Item 10 for additional information regarding Kelso and LMP
ownership.
AP provides discretionary investment advisory, sub-advisory and consulting services primarily to
clients of registered investment advisers (“RIA”) and financial institutions through two distinct
investment programs: Separately Managed Accounts (“SMA”) and Model Portfolio Consulting
(“MPC”). AP also provides discretionary investment advisory and financial planning services directly
to certain clients.
B. Summary of Advisor Partners’ Services
AP invests primarily in exchange-traded equity securities, exchange-traded funds (“ETFs”), mutual
funds, and American Depository Receipts (“ADRs”). AP may also invest in other types of securities
including, but not limited to, fixed income and fixed income ETFs, foreign securities, multi-
currency/foreign exchange, ordinaries and real estate investment trusts (“REITs”); collectively,
“Other Investments.” The “Methods of Analysis, Investment Strategies and Risk of Loss” item in this
brochure contains further information about the investments and strategies employed by AP.
Depending on the type of product selected, AP generally tailors its advisory services to the
individual needs of clients. For example, SMAs are generally highly customized based upon
individual investment goals and objectives mutually agreed upon between AP, the RIA, and the client
of the RIA. Clients may impose reasonable restrictions, mutually agreed upon by the client, the RIA
and AP, on investing in certain securities or types of securities subject to the limitations further
detailed in the “Investment Discretion” item.
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SMA
AP provides discretionary investment advice and management in the form of individually-managed
accounts within its SMA program. AP constructs customized equity portfolios for clients of RIAs.
Clients typically access AP’s SMA services through an RIA where the RIA would select AP as a sub-
adviser; or, clients may enter into an investment management agreement directly with AP. Each
equity portfolio is tailored to the client’s financial circumstances and preferences. The investments
are made primarily in U.S. equity securities and ADRs and may include Other Investments. In
instances where AP serves as a discretionary sub-adviser or as a portfolio manager in a wrap fee
program, AP is fully disclosed to the client and performs discretionary advisory services under
mandate from the client’s financial advisor. When AP acts as a portfolio manager for a wrap fee
program, AP receives a portion of
the wrap fee for its services.
MPC
AP’s MPC services typically involve the construction of model portfolios used by the investment
services departments of financial institutions. The models are typically benchmarked to an index
incorporating screening criteria mandated by the institution. Models primarily consist of individual
equity securities but may include Other Investments. AP may also provide consulting services to
investment professionals, particularly registered investment advisers.
Overlay Manager
As an Overlay Manager, AP is responsible for applying an overlay on a portfolio such as a tax-loss
harvesting overlay, Environmental, Social and Governance (“ESG”) overlay, and/or other factor
screens as selected by the client or determined by AP to be consistent with the client’s investment
objectives. An investment advisor will provide the strategy and objectives of a given portfolio and
the Overlay Manager manages the implementation, trading, reconciliation, and reporting. The
investment adviser charges its own fees while AP receives a fee for its services as the Overlay
Manager. Generally, the investment advisor will debit and collect their fee while AP separately
debits and collects the overlay management fee directly from a client’s account.
Active Manager Allocation
Active Manager Allocation (“AMA”) is a further enhancement of AP’s Overlay Manager product. In
AMA, an investment adviser stipulates the targeted asset allocation that AP manages the portfolio
to. Part of the asset allocation may include allocations to third-party model managers. The
investment adviser, and not AP, contracts with these third-party managers directly. As stipulated
within the contract, these third-party managers share their models with AP so they can be properly
implemented by AP within the AMA strategy. The investment adviser is ultimately responsible for
the due diligence of the third-party managers and verification of these models. AP’s role is only to
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implement the models on behalf of the advisers. The use of these models results in additional fees
that are then paid to third-party model managers. These fees are incremental to the fees specified
by the fee schedule AP has in place with the investment adviser. While AP may assist in the
calculation and debiting of third-party model manager fees, the investment adviser is ultimately
responsible for paying fees to third-party managers.
Direct Discretionary Advisory and Financial Planning Services
AP provides personalized financial planning, asset allocation and discretionary advisory services to
clients who enter into an investment management agreement directly with AP. AP’s services are
customized according to client investment goals and objectives. AP constructs customized equity
and fixed income portfolios typically invested primarily in a custom mix of U.S. and Foreign Equity
ETFs and Fixed Income ETFs.
C. Amount of Assets Under Management
As of December 31, 2023, the firm reported $3,382,642,421 in regulatory assets under management.
In addition, AP advises on $39,095,661 in Model Portfolios created by AP that are managed by other
financial institutions. These assets are not managed by Advisor Partners and are not included in
the regulatory assets under management figure reported herein or on Form ADV Part 1.