Full-Time Financial Advice: $5,000 Per Year
One-Time Financial Planning: $1,500
We offer two services, one for people who want a full-time adviser, and one for people who want a one-time plan.
Our full-time advisory fee is $5,000 annually, regardless of the size of a client’s portfolio. It is deducted quarterly ($1,250/quarter) at TD Ameritrade, our financial custodian. The $1,500* one-time planning fee is paid in lump sum by check or electronic transfer.
We do not charge advisory fees as a percentage of a client’s assets, because that:
Creates clear conflicts of interest
Often results in a client paying much too much
For example, how could a client reasonably expect an adviser compensated by assets under management to offer unbiased advice about the client liquidating a portion of his portfolio to purchase, say, a vacation home, given that liquidating the assets would clearly (and significantly) reduce the adviser’s fee income? We don’t think a client could, and that would clearly not be in his best interest.
And-here’s a dirty little secret of the financial services industry-with very few exceptions, the work required to comprehensively service a larger portfolio (ex. three million dollars) is not materially different or more difficult than the work required to comprehensively service a smaller one (ex. half-million dollars). So why should the larger portfolio’s owner be charged multiples of the fee charged to the smaller portfolio’s owner? We don’t think she should.
Why Flat, And Why $5,000
Our flat fee eliminates such common, real-world conflicts of interest and overcharges. It is based upon the amount of time, effort, and cost it takes to thoroughly administer and service a client’s financial planning and investment management needs over the course of a year, regardless of the size of the portfolio, plus a reasonable profit margin required for us to maintain a viable business.
Combined with our fee-only mandate, it offers unmatched peace of mind to our clients. Because we are paid solely by our flat advisory fee and do not receive any commissions or hidden fees for anything we recommend, they never have to wonder how we’re paid, how much we’re paid, where our incentives lay, or if our interest is aligned with theirs. Our one and only incentive is to act in their best interest.
Could we generate more revenue by ignoring the ethical issues and clear conflicts of interest involved with charging our clients a percentage of their assets, as done by the vast majority of advisors? We could. But we don’t. There is plenty of money for us to make in doing right by our clients.
* Fees for financial plans requiring unusually complex work will be more than $1,500.