wealth managment at a Fair Price

Financial Services at a Fair Price

IYou should have access to trustworthy financial advice at a fair price. Commencement Financial Planning LLC strives to provide comprehensive financial planning and investment portfolio services at the lowest cost possible.

You should be completely aware of the total fees you are paying each year, but the financial industry is quite clever in devising ways to make fees nearly impossible to quantify. Commencement Financial Planning LLC not only clearly explains its fees but also strives to fully understand and quantify all fees associated with alternative solutions it recommends to clients.

Unlike most other financial advisors, the only compensation Commencement Financial Planning LLC receives is what clients pay directly. This creates a relationship free from conflicts of interest and provides the client with complete clarity of the actual expenses they are paying each year.

Advisory fees are calculated either on an hourly basis or an asset-based sliding scale.

Project-Based Hourly Financial Planning Fee

After the initial free consultation, the hourly financial planning fee is $285/hour. These engagements are generally short term in nature and encompass such projects as retirement, education, insurance, estate, and asset allocation planning. Depending on the complexity of your situation, fees for these short-term engagements are typically in the range of $1,500-$3,000.

Asset-Based Fees

Clients with an ongoing relationship are charged only an asset-based fee. These relationships include unlimited access, regular meetings, portfolio reporting and monitoring, coordination with the client’s CPA and attorney, and ongoing monitoring of markets and changes in the law. Account minimum for this service is $1MM.

Asset-based fees for supervised assets are determined using the schedule below. For most clients, the total fees they will pay to both advisor and underlying asset managers will be at or below 0.65% per year.

Portfolio Value Annual Fee

First $1,000,000 = .50% per year

$1,000,001-$5,000,000 = .30% per year

Over $5,000,000 = .20% per year

These fees are much more reasonable than the industry average of 1.01%* and services go well beyond portfolio management to include areas such as tax planning, estate planning, and insurance planning.

Further, underlying fund expenses also matter!  The all-in fund fees for portfolios we recommend generally run about 0.12%.

Simply put, if the fees you are paying plus the underlying fund fees are greater than 0.65%, you are probably paying too much!! 

*Source: PriceMetrix by McKinsey. Average fees are based on data contained in PriceMetrix’s proprietary database, representing more than 25 North American wealth management firms that represent 65,000 financial advisors. PriceMetrix’s data set covers nearly half of retail assets managed by full-service financial advisors. The average fees are based on households with assets of $1 million to $1.5 million. The average fees do not consider other costs, including underlying product costs, transaction costs, or other account costs. Unless otherwise noted, all data is reported as of June 2020.

Fee Comparison

This fee comparison will hold true for smaller accounts as well, but for those accounts, advisors typically will receive payments from front-load sales charges and 12b-1 fees. These fees are often as high as 6%! For an investor with $500k, fees of 6% would total a whopping $30,000 in year one while fees charged by us (including those charged by underlying fund managers) on that same portfolio balance would total approximately $3,100 for year one.

A Note on Relationships

It’s very important that you work well with your financial advisor. Only those fully committed to a cooperative, well-reasoned, and successful relationship where the advisor believes he can bring value exceeding what he is paid will be accepted as clients.