Broker Check

The Old Asset Based Percentage Fee May Now Be An Expensive Legacy 

Our Low Fixed Fee Can Help Reduce Expenses and Increase Cash Flow Each Year.

Your Legacy Percentage Wrap Fee is an External Expense

Your advisor fee is an external professional fee that is a cash expense like your accounting, legal, taxes and medical expenses. As a result it places a cash demand, usually billed quarterly, on your investment accounts. This quarterly fee is met by selling shares of your investments to generate sufficient cash to pay the fee or comes directly out of the income being generated by your investments. Income you use for retirement.

The Percentage on Assets Under Management Wrap Fee

The traditional percentage on assets "wrap fee" structure is approaching 30 years old and is frequently priced at 1% of assets under management. In addition, this percentage fee structure fluctuates and the dollar amount of the fee grows directly with the value of the investments. While the asset based fee may seem to be a nominal charge in relation to the value of your overall portfolio, it can translate into a substantial portion of the annual income generated from your investments.

A 1% on Assets Fee Can Equal 30% of After Tax Retirement Income

For example, a 1% fee on $2 million dollars is $20,000 per year or $5000 per quarter. If you are generating a 4% cash flow from dividends and income that equals $80,000 per year in gross income. After federal and state taxes your net spendable income might be reduced to $65,000. Now, you still have that $20,000 annual advisor fee that is paid each year. The simple math in this sample illustration is clear. $20,000 in annual advisor fees divided by $65,000 in net investment cash flow is over 30% of net spendable income.