How are we able to charge such low fees compared to other firms?

We've cut out the middleman.

Our fees are based on our firm's costs and reasonable compensation for a credentialed financial professional to provide you with asset management and financial planning services. As an independent, fee-only, SEC registered investment adviser (RIA) firm, we have 100% control over our operating costs compared to financial advisors who are employees of other firms. By keeping our costs low for advertising and office space, and placing our capital in areas that make us more efficient, we are able to pass the savings directly to you.

Unlike other financial advisors who are employees of financial firms (i.e., banks, brokerage firms, broker/dealers, other RIA firms, or insurance companies), we do not give a portion of our income to an employer. Some so-called "independent firms" outsource their asset management and back office duties to a turnkey asset management platform (TAMP), a robo-advisor firm, or another firm such as LPL (the middleman). Many of these financial firms and service providers take a portion of an advisor's income based on a percentage of the assets the advisor holds with the firm or service provider. This is why many investors are charged assets under management (AUM) percentage (e.g.,1%) fees.

This is how it works.

Let's assume you have $1 million invested with a firm that is charging you 1% per year. Your fee is $10,000 annually. When the fee is deducted from your accounts, the middleman firm (your advisor's employer) may take anywhere between 50 - 80% of the $10,000 fee and leave your advisor with a fraction of the fee as compensation. The amount your advisor receives is called a "payout" and it's normally a percentage of the fee the firm collects. The $5,000 - $8,000 of your money may go towards the firm's advertising (we see a lot online and in TV commercials), providing your advisor with a posh office in a nice location, company parties, etc. If you are working with a "fee-based advisor" (a fee and sales commission advisor) at one of the larger firms, some independent firms, an insurance company, or a bank investment program, plan on being sold investments with a sales commission and some hidden 12b-1 fees on top of the 1%. That's if the additional sales commissions and fees are even disclosed to you.

Not sure how much you are paying in dollars? Ask us about our complimentary fee analysis.

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