Andrew (left), Karen (center) and Lewis Altfest (right).
Courtesy of Altfest Personal Wealth Management
Most financial advisors today are bound by the so-called fiduciary standard. They typically work on a flat fee or percentage of assets fee and are required to work in their clients’ best interests. Some four decades ago, this wasn’t the case. Sales commissions drove the financial advice landscape and many brokers recommended whichever suitable product gave them the highest fee, regardless of whether it was the best deal for the client.
Lewis Altfest was one of the first advisors embracing the fee-only “fiduciary” model, co-founding L.J. Altfest & Co in 1983 after leaving money manager Lord Abbett & Co., where he was director of research.
“People said that you can’t make money in fee-only financial planning,” Altfest, 84, recalls.
Under the name Altfest Personal Wealth Management, the octogenarian manages some $1.7 billion in assets today as CEO, though it is now a family affair: Altfest’s wife, Karen, and eldest son Andrew, 44, work alongside him as executive vice-president and president, respectively. His wife joined him at Altfest Personal Wealth Management in 1987, starting out by helping around the office before getting her designations and becoming an advisor in her own right. Much of her work today revolves around advising women clients and educating them on financial wellbeing through various events, with a particular specialization in widowhood planning.
Son, Andrew, grew up around the business: He recalls that from a young age, he was often overhearing discussions about financial planning from the backseat of the car, for instance. He started as an intern when he was 14-years-old and later joined the firm full time after college.
The Altfests and team cover roughly 600 households, with a special focus on healthcare professionals like dentists and physicians, who make up the largest client segment. “We are not a big brokerage house where you go into a glass box and sit with somebody,” says Karen Altfest. “Our clients want to hear about our grandchildren and want to tell us about their grandchildren.”
While Altfest Personal Wealth Management has traditionally focused on a mix of stocks and bonds in client portfolios, alternatives have increasingly become popular. On the equities side, the firm originally started with mutual funds only, but have since added individual stocks and active managers as well.
“We’re still active in purchasing individual municipal bonds for clients,” says son Andrew Altfest. “We have also been investing in alternatives in the last few years, in part because we didn’t think bonds were that attractive.”
Lately Altfest, like many other advisors, has been emphasizing alternative investments by buying publicly traded real estate companies like American Tower, Public Storage, Crown Castle and Avalonbay Communities. The firm has also recently added Bitcoin to its offerings in order to meet growing demand, buying bitcoin for clients through an ETF, the Fidelity Wise Origin Bitcoin Fund (FBTC). Another area of interest is infrastructure investments such as utilities, materials and railroad companies. “Infrastructure is more defensive in nature: Their income streams are more stable, less cyclical and so they have embedded inflation protection in their prices,” says Andrew Altfest, who likes the Lazard Global Listed Infrastructure Fund (GLIFX), which is hedged against the U.S. dollar. He adds that utilities are particularly attractive given increasing power demand from households and data centers; One example is Utilities Select Sector SPDR ETF (XLU).
The firm’s latest thematic play to find value, spearheaded by Andrew, is in distressed real estate. Altfest started buying houses out of foreclosure for as low as $3,000 to $5,000 using his personal money when he first started incubating the strategy. The firm purchases land parcels or single-family homes in places like Allentown, Pennsylvania, then fixes them up and makes necessary repairs to make them livable again. Today, most purchases are made for less than $100,000 with the team investing in multiple markets including the northeast, midwest and the south. “Distressed single-family homes are our biggest focus, but we also buy land parcels and sometimes new construction,” says Andrew Alftest.
The firm first started this offering with a seed fund in 2019 before officially launching a first fund in 2021. The second launched in 2023 and the third is planned for this year. So far it has been one of the strongest strategies in the firm’s portfolio. 10% of the 40 people at the firm are now solely dedicated to real estate investing for clients.
Going into 2025, the Altfests are cautiously optimistic about stock market returns, especially after the two previous years of S&P 500 returns exceeding 20% (far above the historical annual average return of 6% to 7%). They predict single-digit returns are likely this year, noting that corporate earnings have remained strong but economic risks like President Trump’s tariffs remain.
“Tariffs will be implemented and are meant to fund the intended reduction in taxes,” says Altfest. “However, they will be materially lower than advertised and more selective by country.”
He says he has seen it all when it comes to market cycles but notes that current high valuations leave little margin for error, however: “At today’s price-to-earnings multiples, we may get another year of the market rally, but if anything goes wrong, there will be plenty of downside.” What’s more, he is telling clients to expect some volatility in the short-term as Trump’s back-and-forth decisions add uncertainty to the market.
As for the Federal Reserve, Altfest expects the central bank to hold back on additional interest rate cuts for now. “The Fed will stand pat, possibly with a small reduction in rates as long as inflation doesn’t turn up materially,” he says. “Early signs are that the inflationary impact will be less than expected.”
