Our clients deserve to know exactly what they pay for the two discrete costs of investment advice and management: (1) our advisory fees, and (2) the costs of the instruments in their portfolio.
To the first cost, our advisory fee schedule is very simple:
- On accounts with less than $1 million, we charge 0.95% (95 basis points)
- On accounts with balances between $1 million and $2 million, we charge 0.85% (85 basis points) on the entire balance
- On accounts with balances between $2 million and $5 million, we charge 0.75% (75 basis points) on the entire balance
- On accounts over $5 million, our fee is negotiable
So, for a client with $1.5 million under advisement, their annual fee, billed quarterly in arrears, would be $12,750.
No complicated blended fee schedules, no mysteries. Our clients know precisely how much they pay for our counsel and guidance.
IMPLEMENTATION (TRADING) COSTS
To the second cost, the investment management implementation (trading) costs borne by our clients have historically averaged approximately 0.12% (12 basis points).
This is fraction of what the costs are for a typical portfolio of mutual funds, a common approach in the industry. Why? We use a buy-and-hold approach with individual securities, and we use very inexpensive exchange-traded funds for efficient broader market exposures. The result is a diversified portfolio that costs perhaps 50% lower than many of our counterparts and improves the potential for stronger investment results.
Thus, using our average advice and implementation costs, our clients pay approximately 97 basis points, all in. 0.97% of $1.5 million = $14,550