Charging based on Net Worth vs. Assets Under Management (AUM)
Our industry is dominated by “advisors” who sell products and/or charge based on a percentage of investments managed.

If you want objective, comprehensive advice, you have to financially structure your relationship that way to avoid any potential conflicts of interest.

Being recommended investments that provide your advisor with a commission is not objective.

Paying your advisor based solely on your investment balances – when you expect that advisor to be equally engaged in non-investment topics (think: estate planning, taxes, insurance etc) – is certainly not comprehensive.

By focusing on your entire net worth, we are able to deliver as much value as possible, wherever it may be, to all clients at all times.

EXAMPLE:
Imagine seeking counsel from your advisor regarding the purchase of a new car, a new home, or a new non-portfolio-based investment opportunity (think: cryptocurrency, a private-REIT, a family business etc.).

Your advisor makes money by charging a percentage of your assets under their management each year, typically around 1%. So, when managing your $2M portfolio, your advisor earns roughly $20,000.

You share the prospective purchase/investment opportunity with your advisor and it’s clear that to fund the purchase/opportunity that you will need to withdraw assets from an account that the advisor currently manages.

Can the advisor truly give you unbiased advice when the decision will require you to withdraw managed funds
(thereby reducing the advisor’s pay)?

Net worth is calculated by subtracting your liabilities from your assets.

Assets include, but are not limited to, things such as cash, investment securities, retirement accounts, cash value of life insurance, and real estate (including home minus the mortgage).

Liabilities include various forms of debt such as mortgages, student loans, and credit cards.

Net worth does not include items such as Donor Advised Fund balances, nor personal property such as household goods, collectibles, or jewelry.

We’ve found Net Worth to be a very good indicator of complexity; the greater your Net Worth the more opportunities you are presented with and the more risks you face.

When my NW grows and I enter a higher band on your fee schedule, does my fee immediately jump to the higher tier?

NO! All fees transition to new tiers over the course of five years.

At the end of a given year we will let you know if your NW has crept into a new fee tier. There is no change in fee for the following year. On the anniversary of the following year, if your NW remains in the higher tier we begin a four year transition of moving to the next fee level, in 25% increments.

We take this approach because growing your wealth should be celebrated. We are interested in long-term relationships and consider our engagement a partnership with you and your family.

NOTE: Clients are provided their fee, in dollar terms, at the end of each year. Client contracts auto-renew annually in January and always allow you to opt-out of the engagement at any point.

Yes! Your fee covers the cost of annual tax planning, tax projections, and tax preparation for your personal tax return. Not included in the fee are any business/partnership returns, foreign returns, or estate/trust tax returns.