What is Fee based Wealth Management?
Fee-based wealth management more closely aligns the goals of
the investor with that of the advisor. Unlike traditional advisors,
we do not charge upfront commissions or invest funds through
a deferred sales charge process where funds are "locked in"
for up to 7 years.
Clients are charged a monthly or quarterly fee for a package
of advisory services. Our fees are based on the complexity of
your situation and the type of planning services you need.
Advantages
Unlike traditional mutual fund investing, as assets increase
there is a corresponding decrease in advisory fees.
For non-registered or corporate accounts, our advisory fees
may be tax deductible.
There is closer alignment with investor goals as it can be
perceived that traditional commission based investing can be
biased toward selling the most lucrative products and high turnover
of investments to maximize commissions. Through a fee based
portfolio we waive the purchase and portfolio rebalancing commissions
for up to 5 trades per year.
There is clear compensation disclosure so you can see the services
that you are receiving and what you are paying for them.
Several Options
- Fee only. Our ideal wealth management engagement is on a
"fee-only" basis where we sell no financial products nor receive
any commissions.
- Combination. As many of our new clients transfer in their
portfolios from brokerage firms and other advisors, invariably
many of their funds are invested through the deferred sales
charge option. Rather than incurring thousands of dollars
in redemption fees, we offer an option in which we receive
trailer fees from the fund companies and offer a reduced advisory
package that covers all purchases and rebalancing costs up
to 5 trades per year in addition to offering comprehensive
advisory services.
We're pleased to discus your situation in more detail and recommend
the most cost effective package for you.
Investment Management Process
1. Complete Investment Policy Statement
(IPS),
Develop Retirement plan and Ideal Asset allocation
2. Transfer holdings. Initiate process of
transferring portfolio to us. Unless held in proprietary investments,
we usually transfer "in kind". We send out the transfer forms,
follow up with the transferring institution and ensure that
all the funds are received.
3. Develop Draft allocation. Using the information
obtained from the IPS, retirement plan and ideal asset allocation,
we develop a draft allocation for the how the funds should be
allocated.
4. Manager Selection. We then identify potential
money managers and perform a correlation analysis to ensure
sufficient diversification and a portfolio analysis to ensure
that potential rates of return are within the parameters indicated
in the detailed retirement plan.
5. Once the portfolio transfer is complete,
we analyze the holdings for tax implications and potential deferred
sales charges and once agreement is received, allocate the funds
as per the Ideal Asset Allocation
6. We review and monitor the portfolio and
have regular progress and update meetings with you.
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