- Fixed Fee Pricing
- Financial Planning
- Employer Plans
- About Clarity
Our Fixed Fee Pricing is Simple and Straightforward
Other advisors ask us why we charge so little to do so much?
We ask them why they charge so much to do so little?
When it comes to investing, the more you pay to an advisor, the less you keep invested. Financial advisors have been charging asset-based (AUM) percentage fees (e.g.,1%) since the early 1990s. Financial technology has drastically reduced the costs for advisors to provide financial planning and investment management services to their clients. Clarity has passed the savings directly to our clients in the form of low, fixed advisor fees.
If you're paying a financial advisor more than half of 1% per year, then you need to talk to us.
We don't charge a percentage of your assets (AUM fee) every year, as this can be quite costly over time.
Our fees stay fixed as your account values increase, keeping more of your money working for you.
Discounted Fees for Premium Wealth Management Services
Clarity's low, fixed fees are based on our firm's costs and reasonable compensation for a credentialed financial professional to provide you with investment management and financial planning services. Your fixed annual advisory fee is based on the value of the accounts we manage for you.
How Our Fixed Advisory Fees are Calculated
Calculating your fixed annual advisory fee is simple and straightforward.
Let's assume the total of the assets you would like us to manage is $1,000,000 and below. Simply multiply the amount by half of 1% or .0050. Example: $800,000 x .0050 = $4,000 fixed annual fee ($1,000 per quarter). Unlike asset-based or AUM advisors our fee does not increase based on the growth in your accounts due to market appreciation.
Now let's assume your assets total $3.5 million. The first $1,000,000 would be $1,000,000 x .0050 = $5,000, the next $2,500,000 would be at one-fifth of 1%. $2,500,000 x .0020 = $5,000. Your fixed annual fee would be $10,000 ($2,500 per quarter).
Asset Amount Annual Advisory Fee
First $1,000,000 0.50%
Next $5,000,000 0.20%
Above $6,000,000 No Fee
Fees cover all accounts within a client's household. Advisory fees are billed to your investment account(s) quarterly in arrears.
No minimum asset requirements. However, our minimum annual fee is $2,500 per year ($625 per quarter).
Advisory fees are capped at $15,000 per year.
We don't nickle-and-dime you for different services.
Our advisory fees include ongoing investment management and financial planning services such as retirement planning, college planning, and investment planning.
We save our clients thousands of dollars in advisory fees every year!
Where does your current advisor's annual fee rank on this chart? If you don't know, you owe it to yourself to find out.
The annual asset-based fees used in the chart and calculations below are from the AdvisoryHQ study, "Average Financial Advisor Fees and Costs 2017 Report."
Our Fixed Fees vs. an Asset-Based Fee (Fee-Based) Advisor
A fee-based advisor may also recommend investment products that include sales commissions or hidden fees in addition to their annual asset-based fee.
See below for a comparison between our annual fees and industry average annual fees on both a dollar and percentage basis.
Clarity's Low, Fixed Annual Fees vs. Industry Average Asset-Based Annual Fees
- Client 1: $500,000 $2,500 = 0.50% $5,250 = 1.05%
- Client 2: $1,000,000 $5,000 = 0.50% $10,200 = 1.02%
- Client 3: $2,500,000 $8,000 = 0.32% $22,000 = 0.88%
- Client 4: $5,000,000 $13,000 = 0.26% $42,000 = 0.84%
- Client 5: $7,500,000 $15,000 = 0.20% $57,750 = 0.77%
Q: We are currently with another advisor and pay more than your stated fees. How can we work with Clarity Capital Advisors and save money?
A: First of all, you don't need to sell your existing investments to work with us. In most cases, we are able to easily manage your investments at our low, fixed fees. Talk to us about getting started.
Many financial advisors require their new clients to liquidate their existing investments to move into the advisor's recommended investments and asset allocation. We recognize that while this may be convenient for the advisor, it may be expensive from a tax standpoint for investors with significant embedded capital gains. Assuming your investments align with your financial goals, ask us how we can manage and monitor your existing investment accounts at a reasonable cost and incorporate our financial planning services.
Your investment accounts will be held with our custodian TD Ameritrade Institutional. TD Ameritrade Institutional (TDAI) does not charge any annual account or maintenance fees. If your accounts are currently held with TDAI you will simply sign one Limited Power of Attorney (LPOA) form for each account you would like us to manage. The LPOA limits our access to your accounts. We are limited to the purchase and sale of securities and the authorization to debit our fees from your designated account(s).
If your accounts are not held with TDAI, we will provide you with signature ready documents to make the transition as easy as possible. To facilitate the transfer we will need a copy of your most recent statement from your current advisor. Please be advised that your accounts will transfer with the investments you currently hold so you do not have to worry about being out of the market during this process. The transfer time from most firms to TDAI is ten business days. Your advisor's firm may charge a small one-time transfer fee per account.
FACT: High advisor fees counteract the use of low-cost investments
We see financial advisors touting low-cost mutual funds or a low-cost investment strategy while charging their clients 1% or a tiered percentage asset-based fee. This defeats the purpose of a low-cost investment strategy. With historically high market valuations and very low interest rates contributing to lower future investment returns, wise investors do all they can to control investing costs. One of the easiest ways to do this is to avoid using a financial advisor who charges you an annual advisory fee based on a percentage of the assets you place with them to manage. The good news is that you now have a viable alternative to high-cost advisors that requires no sacrifice in the level of service received, Clarity Capital Advisors.
A 1% Advisor's Fee and Your Retirement
Let's assume you establish an annual withdrawal rate of 4% from your investments to fund your retirement. Are you still willing to pay an advisor 25% of your retirement income? Example: You have accumulated $1,000,000 in retirement assets, a 4% withdrawal rate would be $40,000 per year and the advisor's 1% fee would be $10,000 per year. Now let's assume that you have $2.5 million for retirement and you are taking out 4%. That's $100,000 per year and your advisor's fee is $22,000 per year based on the chart above. This would equate to 22% of your retirement income.
Fixed Fee Fiduciary Wealth Services:
- Investment Management - Asset Allocation, Investment Selection, and Portfolio Management
- Financial Planning - Retirement Planning, Investment Planning, Retirement Income, College Planning, and Charitable Giving Strategies
- Account Consolidation for Estate Planning - Simplify your financial picture with account consolidation.
- Employer Retirement Plan Investment Review and Recommendations
- Low-Cost, Tax-Efficient Investment Portfolios comprised of Dimensional Fund Advisors and Vanguard mutual funds.
- Quarterly Client Investment Portfolio Review - In person or online through our free video conferencing service join.me
- Quarterly Portfolio Monitoring - We review your accounts every quarter to make sure your allocation is consistent with your goals.
- Portfolio Rebalancing and Tax Loss Harvesting, as needed
- Quarterly Portfolio Performance Reporting and Gain/Loss Accounting - There is no need to wait for a quarterly report to be delivered to your home, your account performance is updated daily.
- Account Creation and Transfers - Signature ready account forms to simplify the transition to Clarity Capital Advisors.
- Institutional Share Class Mutual Funds - No Sales Commissions, No Hidden 12b-1 Fees
- Annual Risk Assessment and Wealth Plan Overview - To keep you on track.
- Client Portal - View your TD Ameritrade Institutional statements, Quarterly Performance Reports and Invoices online
- Other Services - Roth Conversions, Required Minimum Distributions, and Retirement Rollovers
4 Good Reasons NOT to Pay an Advisor 1%
1. It ties the advisor’s compensation directly to the performance of financial markets. Financial advisors do not control market movements up or down, nor can they predict them. So why should their compensation be based on an increase or decrease in your accounts due to market movements, as it is with a percentage fee? Well, it shouldn't. How about paying a fair, fixed fee (flat fee) based on the services they provide, their experience and credentials? Now that makes sense!
2. The 1% advisory fee might seem trivial, but have you ever calculated a 1% fee on your assets? Or the expense ratios (investment costs) associated with your investments? Are you aware that there might be hidden fees in your mutual funds called 12b-1 fees? Over time, high fees and costly investments cause people to work longer and can rob retirees of a significant portion of retirement income every year. If you need help calculating your current fees and expense ratios or would like a second opinion, please contact us.
3. Don’t believe these common lines from advisors to claim unity with you. Advisor: “Our 1% fee (or other percentage fee) means that when you do better we do better.” Or one of our favorites. Advisor: “Our 1% fee means that we are sitting on the same side of the table as our clients.” Clarity’s interpretation of these lines is "the more YOU make, the more THEY take, year after year, regardless of which side of the table they sit on.” See #1 & #2.
4. The 1% fee is a very expensive trap investors have been caught in for decades. Just because it’s commonplace, does not make it right. At Clarity Capital Advisors, we are committed to keeping our advisory fees and investment costs low so our clients can increase their investment returns and have a better opportunity of achieving their financial goals. This is what real fiduciary advisors do!