Unique Financial Challenges Physicians Face
According to the Association of Medial Colleges, 76% of medical school students graduate with at least $192,000 in student loan debt. Furthermore, it is unlikely that they will pay down much of this debt during their residency period. The beginning of the high earning years for physicians is 7 to 11 years after completing their undergraduate work. This compressed earning period demands a higher savings rate compared to other professionals. Therefore it is essential to have a financial plan that maximizes the use of tax deferrals, keeps costs at a minimum, and manages risks such as disability and lawsuits.
When it comes to investing, the less you pay, the more you keep.
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.
Flat Fee Wealth Management is Smart
Millions of investors pay more than they should to financial advisors. High-cost financial advisors will normally charge an annual advisory fee of about 1% or a tiered percentage based on the value of the assets you place with the advisor to manage. This is commonly referred to as an asset-based fee.
A 1% fee might seem trivial, but at $1 million, 1% would be $10,000/year, $2 million $20,000/year, and so on. Financial technology has drastically reduced the cost for advisors to provide wealth management services to their clients. Therefore, it simply should not cost $20,000 to manage an investment portfolio of that size. Think about it: As your investment accounts increase over time simply due to market appreciation, so does the advisor's asset-based fee. Asset-based advisors may use the phrase, "when you do better, we do better" or "we sit on the same side of the table as our clients" to claim unity with you. Our interpretation of this phrase is, "the more you make, the more THEY take, year after year" and it really doesn't matter which side of the table an advisor sits on.
We don't nickel and dime you for different services.
At Clarity, we don't have separate fees for investment management and financial planning services. Our fixed advisory fees include ongoing investment management and wealth planning services such as retirement planning, college planning, charitable giving strategies, and generating an income in retirement. Fees normally range between $1,250 to $3,750 per quarter or $5,000 to $15,000 per year and cover all accounts within a client's household. The considerations in determining your initial fixed annual advisory fee may include the number of accounts and account values. Advisory fees are capped at $20,000 per year and are billed quarterly in arrears to your designated account(s).