We believe that "Flat-Fee Advice-Only" pricing is the best way reduce the inherent conflicts of interest, and give the most objective advice. Fully integrated, coordinated advice is the best way to help you live rich and fulfilled life, not just die rich.
We are committed to fair dealing with clients… and so we put our money where our mouth is. Rather than arbitrarily deriving our compensation from the value of an investor’s portfolio, how much they make a year, the tide, or what phase of the moon it is… we base our fees on the cost of our services, reasonable compensation to the team, and the value we provide. We believe that the flat annual fee (broken into easy monthly payments), is the best way to offer: the Financial Life Planning Process, Wealth Oversight, and Financial Advice. So that is what we did, we combined them into a more effective and efficient process.
We strive for the low cost, tax efficient, cost-effective solutions, such as dimensional, factor based investment management. After tax money and progress toward you goals are what matter. One of the ways we can help our clients is by setting up a portfolio that consumers don’t have access to. Another way is to keep that portfolio cost as low as possible.
"It is difficult to get a man to understand something, when his salary depends upon his not understanding it!" Upton Sinclair
The financial services industry wants financial advisors to:
A: Manage investments, where you might be charged 1+% or more of the account value on an ongoing basis. This is above and beyond the fund fees and the platform fees.
B: Sell you permanent life insurance, where The advisor might make 50% of the annual premium in an up-front commission (with decreasing commissions based on your ongoing premiums).
C: Sell you a precious metals or “self banking” scheme where you miss out on the opportunities of leaving your money in the market.
That is because the big companies have to charge unconscionable fees to pay for their massive advertising budgets, downtown palaces, and often for the lawsuits against them.
In the really old world, advisors were paid in commissions. In the world of sailing ships and commodities, it made a lot of sense.
But with electronic investing, it led to advisors trading far too often, just to earn more fees. It also led to many industry myths, like an advisors ability to beat the market.
"No cost to you" is a common sales pitch, of annuity and insurance salespeople trying to look like financial advisors.
If the only tool you know how to use is a hammer, everything looks like a nail.
If your only tool is selling financial products, every person looks like a dollar sign.
Fee-Only Investment advisors moved to AUM type fees, to reduce churning and the appearance of conflicts of interest.
Assets Under Management
In the old world of AUM, salespeople are one step closer to becoming a true advisor. But AUM creates some conflicts of interest of its own. One is for the "advisor" to gather as many assets as possible, for the lowest amount of work, at the highest possible fees. That is called Asset Hoarding, and is still a major problem in the financial advice industry. One thing that happens under AUM; advisors stop advising on anything that they are not directly payed for. Another thing that happens; AUM advisors may discourage paying down debt, gifting, extensive traveling, buying real estate, or purchasing an annuity... and you won't be sure whether it is because it would reduce their take home pay, or if it is really the right advice for you. This often causes higher net worth investors to overpay for advice, but also creates more, often-unspoken, conflicts of interest.
This is the new world of transparency, and that starts with Flat Fee prices. While Fee-Only is far better than Fee-Based, it is not always fair to charge someone based upon their income, net worth, or the value of their investments. We believe your fees should be based on the complexity of your financial situation and the amount of work involved- not just the amount of investable money you have and how much a finance company can get out of you. Flat Fees advisors can work with you if most of your assets are tied up in a business, real estate, or farm. Flat Fees are also great for high earners to get access to real planning and advice, without having any assets built up. Flat Fees allow people access to real financial planning that literally could not have gotten it the traditional ways.
For most clients having either an AUM based advisor or commission based advisor ends up costing the same over time. The problem is that there are material conflicts of interest with each way traditional financial advisor get being payed.
The other all to common problem with these old ways is transparency. Most clients just do not understand how much they are paying, and what they are getting.
While Fee-Only is better than Fee-Based (and Fee-Based is better than Commissions); it is just not always fair to charge someone based upon their income, net worth, or the value of their investments. So Fee-Only is just the new minimum. Now, there are simply better ways to charge... like Hourly, Flatt-Fee, and the monthly subscription model.
We take our oath as your Fiduciary seriously, that means we are as concerned about the fees you pay, all of them. Over the last few decades, technology and innovation has significantly reduced the cost of providing wealth management. When we find more efficient processes or technology, we pass most of that saving on to you. Our commitment to keep all of our clients fees low helps us deliver extreme value. It helps our clients achieve their investment goals faster, and it is the right thing to do.
Most investors are charged AUM fees, which are percentages normally directed directly from accounts, and so most people do not have any idea how much they actually pay. We don’t think that is right. We believe in total fee transparency, so we only have a single, inclusive flat-fee. That is our total planning and advisory fee for that year. No AUM, no 12b-1 fees, no hidden fees, no commissions, no referral fees, no surprises- just real, honest, advice.
Wealth Management Oversight is only offered for Engaged Financial Planning Clients.
We are a Financial Planning firm, not AUM “asset hoarders.”
We are not day traders, “hot stock” pickers, or gamblers.
We base our fees on complexity, cost, and the amount of work involved; not just how much money you have.
However, this table is a good example of how those fees often match up with the normal industry fees. We don’t have any asset minimum, but we have a minimum fee for our work. Our minimum fee for this comprehensive planning work is $3,000 a year, and our maximum is $12,000 dollars. Even if you have 50 million, it is still $12,000. Our flat fee stays fixed as your assets grow. As long as the complexity, risk, inflation, or amount of work needed does not go up; our fees will not go up.
This puts our pricing structure is in line with other legal, medical, and tax professionals – one simple, transparent, and straightforward fee.
Higher net worth investors are usually overpaying for advice.
It does not cost an advisory firm 2 times as much to manage a portfolio of $1,000,000 than a portfolio of $500,000.
It does not cost 5 time more to manage $5,000,000 than $1,000,000.
Why, then, should clients pay so much more to receive the same services?
Greed. or “that’s just the way it is” is not a good enough answer.
The relative value of an investor’s portfolio should not determine the fees you are charged for advice.
Especially when most of that advice that people need is not even directly about investing and the portfolio.
Do you know what a 1% advisory fee is in dollars? Most investors are very surprised by the numbers, and what they have been paying.
$500,000 x 1% = $5,000 (You should be getting a real financial plan for this much money, but it is rare.)
$1,000,000 x 1% = $10,000 (You should be getting comprehensive planning and advice, but most are not.)
$2,000,000 x 1% = $20,000 (This client is probably over paying by at least $10,000, on average.)
$3,000,000 x 1% = $30,000 (This client is probably over paying by $20,000. At this fee level, you should be getting full collaborated, coordinated, and comprehensive advice for your whole family and small business.)
AUM Investment Advice VS Flat Fee over 20 years- you could keep $628,534.37 more for your life, goals, and family.
The difference between a typical 1% investment advisory fee and a flat annual retainer fee over a long period of time can be overwhelming. If we assume a 7% return on a portfolio, a 1% advisory fee can cost an investor with a $1,000,000 portfolio well over $500,000 in lost returns over twenty years when compared to a flat annual retainer fee.
– The flat annual fee, for all 20 year, would have been between $60,000 and $100,000: depending upon other complexity needs of the plan.
4,038,738.85 – 3,310,204.48 = 728,534.37 – $100,000 = 628,534.37 more for your family.
Comprehensive Financial Planning Pricing
Monthly Subscription Pricing – We charge an single, flat-fee, annual retainer fee; based on the complexity and volume of the work needed. To make it easier on working families, we internally finance that fee into a payment plan. Because most households plan for expenses and budget on a monthly basis, annual retainer, fees are billed on a monthly subscription. This monthly subscription pricing model allows more households to be able to afford financial planning than either the traditional lump-sum or AUM (% of Assets Under Management) model. We do not have and income, liquid assets, or net-worth requirements. Our minimum annual fee for comprehensive planning is $3000.
Compensation Examples for Financial Planning Relationship; Planning, Coordination, Oversight, and Advice
|Annual Retainer Flat Fee||$3,000 depending on service needs.||$5,000 depending on service needs.||$7,000 depending on service needs.||$9,000 depending on service needs.||$12,000 depending on service needs.|
|Paid in monthly payments.||$250 /month||$417/ month||$583/month||$750/month||$1000/month|
|Included Portfolio Planning Oversight Amount||$500,000||$1,000,000||$2,000,000||$3,000,000||$5,000,000|
|Fee-Only, Fiduciary Relationship||X||X||X||X||X|
|Female Focused Finance||X||X||X||X||X|
|Life Planning: Values, Goals, & Purpose Design||X||X||X||X||X|
|Cash Flow Planning & Emergency Funding Coaching||X||X||X||X||X|
|Student Loan & Debt Management Advice||X||X||X||X||X|
|Net Worth and Portfolio Planning||X||X||X||X||X|
|Employee Benefits Optimization||X||X||X||X||X|
|Credit Score Counseling||X||X||X||X||X|
|Foundational Risk & Insurance Planning||X||X||X||X||X|
|College Savings Plan||X||X||X||X||X|
|College Pre-Approval and Planning||X||X||X||X|
|Retirement & Savings Planning||X||X||X||X|
|Merging Finances / Starting a Family||X||X||X||X|
|Giving & Charity Coaching||X||X||X||X|
|Career Development Mapping||X||X||X||X|
|Home Ownership & Mortgage Guidance||X||X||X||X|
|Family Focused Finance||X||X||X|
Long Term Care
|X||X (Comprehensive)||X (Comprehensive)|
|Legacy and Estate|
|X (Foundational)||X (Comprehensive)||X (Comprehensive)|
|Vehicle Purchase Guidance||X||X|
|Comprehensive Risk Management||X||X|
We have one simple flat fee based upon the complexity of your situation.
Often that fee is $3,000-$5,000, what you would pay for a 1 time plan alone.
So instead of paying for pieces of what you need, you get access to all of it.
Our Overall fees tend to be lower because we do exactly what you need, only when you need it.
Efficiencies: By time blocking throughout the year we gain can get more done. By aggregating certain workloads with our Subject Matter Experts, we lower our expenses. By being fee conscious, planning properly, working virtually from home, and keeping marketing to a minimum; we lower our own overhead, and thus the cost of our services.
Normal Prices for other Advice-Only financial planners and advisors:
Hourly on a billing rate of $250/hour:
Investment Portfolio Review/ 2nd Opinion $500
Custom Investment Portfolio Plan $2,500
Retirement Income/Cashflow Plan $2,500
1 time, Full Comprehensive Plan $3,000 – $ $5,000
The problem… None of this includes coordination, implementation, life planning, or ongoing advice and guidance.
Advice-Only Goes Beyond Fee-Only
A Fee-Only advisor and an Advice-Only advisor share the following characteristics:
The advisor’s firm is a Registered Investment Adviser (RIA) registered with the SEC or at the state level
The advisor acts as a fiduciary and puts your interest first.
The advisor has Certified Financial Planner (CFP®) certification, other professional credentials, or qualifying experience.
- The advisor does NOT sell products that pay the advisor a commission (cash-value life insurance, annuities, load funds, individual muni bonds, non-traded REITS, limited partnerships, etc).
So far that’s the same as Fee-Only. Advice-Only goes above and beyond Fee-Only by adding:
The advisor does NOT up-sell you on managing your money for a recurring fee either as a percentage of your asset value or on a monthly or annual retainer.
The advisor does NOT, for a kickback or markup, refer you to someone else who will manage your money for a recurring fee. Recommending unaffiliated financial institutions is OK.
The advisor strictly offers his or her advice for a fee. The advisor treats you as a competent adult able to follow the advice. Assistance in opening accounts or filling out forms is OK. Accepting prepayment for follow-ups or incidental questions that come up is OK.
Advice-only means no commissions and no asset management fee.