Fee-Only Advisors: What are you actually paying for?

Financial consultant reviewing statistical graphs and charts

Oftentimes, making financial decisions can be overwhelming and emotional. In a world inundated with information via the internet, it can be hard to make heads or tails of it all. Working with a financial advisor can provide direction and peace of mind when making decisions, but how do you find a relationship that you can trust?

A good place to start is asking how the advisor is compensated. Working with a fee-only advisor can largely impact the services you receive. A fee-only advisor is paid by the client for the advice they give, not by product sales or commissions. This fee is typically on a project, hourly or retainer basis, or a percentage of assets under management. Be careful not to confuse fee-only with fee-based, which can include a client fee and commission component. Continue reading

Why are you fee-only and what does that mean?

Team
Why are you fee-only and what does that mean?

We are often asked about our decision to be a fee-only financial planning firm. The term ‘fee’ occasionally throws people off, and we thought we should share about our decision and how it benefits our clients.

When we started the firm in 1990, we made the decision that we didn’t want to be bound to commissions. We wanted the freedom to make decisions based on the unique needs and goals of our clients. In short, we decided to be fee-only before fee-only was cool.

At the most basic level, fee-only simply means we are compensated solely by our clients, not by commission. As fee-only planners, we don’t earn commission from sales and we do not sell our clients products. Instead, we are required to act in the best interest of our clients — an important distinction.

At SH&J, we are paid by a percentage of the money under our management, and a flat fee for financial planning. In essence, our clients pay for our advice and our responsible investment management.

As fee-only planners, we are also proud members of NAPFA, the National Association of Personal Finance Advisors. You can read more about NAPFA standards here. We think the Wall Street Journal summarized their standards and fee-only planners well when they said, “They accept no commissions at all and pledge to act in their clients’ best interests at all times. In many respects, NAPFA standards meet or surpass the requirements needed for a CFP credential,” source.

We’d love to meet with you to talk more about our firm and discuss how we can partner together to help you plan, invest and succeed. Contact us today >

What do you charge for your services?

We knew we didn’t want to be bound to selling products to our clients. We wanted freedom to offer objective advice to our clients without an agenda to sell them products. Therefore SH&J was founded and still is a fee-only or non-commissioned firm.

Fee-only means our clients pay us a flat fee for our advice, not for products. We do not work on commission and are only paid by our clients. One of our founders, Larry Howes, says, “All of our efforts are designed to get you a better result.”

Melissa does a great job of giving you a quick rundown on our fees.

Here’s a quick overview of the information Melissa shared:

Financial Planning

  • One-time fee depending on case complexity
  • Planning fees range from $500-4,500.00
  • No additional charge for planning updates

Investment Management

  • 1% of assets under our management up to the first million
  • Reduced rate on managed assets above $1,000,000.00
  • Fees billed at 0.25% at the end of each quarter in arrears

Other small charges may include a fee for portfolio design, strategic implementation and asset transfers.

We’d love to meet you to share our firm’s philosophy with you in person. Give us a call at 303.639.5100 to set up a time to come in.