Investment advisor fees for active portfolio management services are calculated annually ($5,000 minimum):
- 1.00% of assets managed of the first $1,000,000
- .75% of assets managed on the next $2,000,000 up to $3,000,000
- .60% of assets managed on the next $2,000,000 up to $5,000,000
- .50% of assets managed above $5,000,000
- Our fee is based on the complexity of the project and will be agreed on upfront.
- Education planning, business interests and real estate holdings add to the complexity and vary dramatically based on the individual situation and personal objectives.
- Our plans are created with meticulous, personalized detail.
Financial Advisor Fees Comparison
As you choose an advisor, or continue to work with the one you have, you should fully understand how they get paid. Advisors who have a commission or sales incentive component to their compensation may have different goals and objectives than those who are only paid by you directly. If you don’t fully understand your advisor’s complete compensation structure, you should seek out another relationship, and beware: the thicker the documentation that explains your advisor’s compensation, often the more costly the service.
- Advisors don’t sell any products, don’t accept any covert compensation and don’t benefit from recommending a specific solution.
- The only form of compensation is what their clients pay them directly – their compensation is typically in the form of a percentage of the assets they manage, a monthly or quarterly retainer, a flat fee for a specific engagement, or an hourly charge for a consultation.
The fee-only model all but eliminates the opportunity for a conflict of interest to exist.
- Advisor compensation is a blend of the commission-only and fee-only models and is commonly a misunderstood type of relationship.
- The advisor is eligible to receive both direct fees from you as well as commissions and other compensation from the sale of products.
- While the term “fee-based” sounds very similar to the term fee-only, the fee-based model is susceptible to the same conflicts of interest that the commission-only model entails.
The tricky part of this relationship structure is determining what type of compensation will result from each interaction with the advisor and the burden is on you to figure it out and make decisions accordingly.
- Traditional sales model: they only get paid when they successfully sell a product such as a mutual fund, insurance policy or an annuity; otherwise, they receive no compensation.
- Sometimes the compensation will be paid up-front in a traditional sales load. Other times it will be paid on the back-end as an annual trailing commission or some combination of the two.
- Additionally, there can be more covert compensation in the form of bonuses for selling a large volume of a certain product or a specified number of transactions.
This type of compensation creates the opportunity for a conflict of interest. The conflict arises because the advisor has an incentive to recommend the products that pay him/her the most whether those products are the best solutions for you or not.