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$1B AUM Wealthquest Receives PPP Loan

Ohio-based Wealthquest said it hoped to use the loan to retain its staff and fund payroll costs and health and insurance benefits for employees, according to an updated Form ADV submitted to the SEC.

Wealthquest, a registered investment advisor with offices in Cincinnati and Chicago, applied for and received a Paycheck Protection Program (PPP) loan, according to an updated Form ADV submitted to the SEC.

In the form, dated May 15, the firm wrote that while it does not believe that it is unable to meet contractual commitments to clients, it applied for a loan due to the “economic uncertainty” surrounding the economic impact of the coronavirus, so that it could maintain its fiduciary service to clients and retain its staff. The company received the loan in April, according to the Form ADV, though the exact amount of the loan was not disclosed.

“The firm intends to use this loan to pay qualifying expenses over an eight-week period, including: payroll costs, the continuation of healthcare and insurance benefits for its employees, mortgage interest, rent, utilities, and other relevant firm expenses,” the form read.

The RIA has close to $1 billion in assets under management on a discretionary basis and $2.5 million in assets under management on a nondiscretionary basis, according to the Form ADV.

The PPP was part of the CARES Act, which Congress passed in late March to help offset the financial cost of COVID-19’s spread in the United States. The PPP loans were purportedly intended for businesses to help keep employees on staff, with the loan being forgivable if 75% of it is used for payroll in the eight weeks after it’s dispersed, if employees don’t suffer a 25% reduction in pay and if the company has the same employee head count by the end of June.

While RIAs have assisted clients through the application process, some firms have pursued loans for their own businesses. From the start of the process, RIAs experienced many of the same issues other applicants did, including convoluted federal guidance and long wait times. Additionally, the initial $350 billion allocated for the program ran dry within weeks (Congress subsequently allocated an additional $320 billion for the program).

Wealthquest was founded in 2006 by CEO Wade K. Daniel and President James M. Lenhoff; according to the firm’s Form ADV, the firm works with individuals, families, ERISA plans, charitable organizations, business entities, and trusts and estates, offering investment advisory and financial planning services, as well as estate and retirement planning and tax preparation. 

Prior to the Form ADV submitted in May, the company had submitted its annual form at the end of March.

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