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Choosing amongst the many financial advisors, financial planners, and wealth managers can be daunting. There are a lot of credentials and designations to consider. Consider reading: CPA, CFA, or CFP®: Pick Your Abbreviation Wisely. At Intelligent Investing, we have all three of the best-known professional designations in the financial industry.
When it comes to how an advisor gets paid, unfortunately, the water becomes even murkier. A fee-only financial planner sounds strikingly similar to a fee-based financial planner, but there’s a big difference in how they get paid. Here’s what you should know about fee-only and fee-based financial advice:
Fee-only financial planners are registered investment advisors with a fiduciary responsibility to act in their clients’ best interests. They do not accept any fees or compensation based on product sales. Fee-only advisors have fewer inherent conflicts of interest, and they generally provide more comprehensive advice. The advisor does not receive a fee or other compensation from another party based on the referral of a client or the client’s business. Fee-only advisors help reduce the conflicts of interest inherent in how they get paid and what they recommend.
Although fee-only financial planners may include other methods of charging clients such as a flat retainer, or hourly rate, they typically will charge based on a percentage of assets under management. Intelligent Investing typically charges clients based on a percentage of assets under management.
Another advantage of a fee-only financial planner is that there are no financial hooks, surrender charges, or lockup periods. Clients are free to leave at any time if they are disappointed.
Commission-based agents and brokers often don’t like this distinction. Blurring the difference, they created the category dubbed “fee-based,” which sounds a lot like fee-only. However, it means they charge a fee in addition to collecting commissions. Study after study shows that even consumers seeking a strictly fee-only advisor find these terms confusing.
Most commission-based agents and brokers are no doubt sincere people trying to do honest work for their clients. However, based on our study of human behavior, we believe human nature is bent, and good intentions often fall prey to repeated temptation, especially in gray areas. The fees of commission-based agents and brokers are tied to specific products and transactions. This model completely misses much of what clients need. Although commission-based agents can serve their clients in unique ways, product commissions seem a backhanded way to acquire comprehensive wealth management.
Broker-dealers have another potential conflict of interest…revenue sharing. Generally, revenue sharing payments are a percentage of broker-dealer client assets invested in a particular fund. This means the broker-dealer gets paid a percentage from the fund company to put clients in a certain fund or investment. This may or may not be best for the client. As long as the investment is “suitable” for the client, which is a lower standard than the fiduciary standard, they can get away with this.
Our primary fee structure is based on managing all of our client’s financial affairs. Many of the services we perform for clients depend on an integrated financial plan that goes beyond investments. Our services strive to be more holistic, and often we will collaborate with other professionals, such as estate planning attorneys and CPA or tax professionals.
We charge a percentage of assets under management because of our emphasis on offering comprehensive wealth management. We get paid one way…by our clients. Period. We are not incentivized to put our clients in any products or investments via revenue-sharing agreements. Since we are independent, if we think it is best for a certain investment to be in a clients’ portfolio, we will put it in that clients’ portfolio.
Our clients’ fees (based on a percentage of the assets we are managing) get them access to us any time they need us. We purposely don’t add an hourly rate. We do not want clients to hesitate to contact us. If there is an hourly charge, many clients wouldn’t call even when they should.
We are fanatics of the 100% fee-only model. We would much rather see consumers handling their finances on their own than wondering if the products they have been sold are really the best option to meet their goals. It is also why we give away as much “do-it-yourself” information as we can. We want consumers to be as informed as possible about good wealth management techniques.
If you’d like to become a client of Intelligent Investing, please click here to call or schedule a “discovery” meeting.
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On this episode of Intelligent Money Minute, we’ll be interviewing Shelly Hamilton on living in a glass house. During this episode, Shelly is joined by her son-in-law, Adam Morgan. A glass house is a term used for more those whose lives are more public than the average person. They talk about the hurdles, challenges, and experiences of living in a glass house. Shelly stresses the value of staying true to their faith and values whether people are watching or not.
One of Intelligent Investing’s core values is Truth. We believe that speaking the truth in love is so vital…especially when it comes to talking within families. We strive to unite families with financial communication, and if you are going to be transferring your business in the near future (especially to another family member), we’d love to start having a conversation with you. We can help be the liaison between family members, and we can help you plan for the many aspects of transferring a business.
If you haven’t subscribed to our podcasts, you can go to our podcast page and choose whichever method you want to download them. While you are there, you can go to our blog page and subscribe so you can get our latest Intelligent Insights directly in your inbox.
Shelly Hamilton, the daughter of Frank Garlock, married Ron Hamilton aka “Patch the Pirate” in 1975. They have managed Majesty Music and written sacred music for children and adults since they joined the ministry in 1978. Shelly currently ministers at Majesty Music as pianist, composer, arranger, and recording producer. In 2013, their son killed himself after years of struggle with mental health issues. The family’s public struggle and acknowledgement of mental health issues has reached people around the world. Most recently her family faces a new challenge: Ron Hamilton’s early onset of dementia. Her insight and music will encourage anyone facing the challenges of life.
In January 2018 Majesty Music announced their third generation of leadership. After years of waiting for God’s timing, Ron and Shelly transitioned the ministry over to their son-in-law Representative Adam Morgan and his wife, Ron and Shelly’s daughter, Megan.
Podcast: Play in new window | Download
Podcast: Play in new window | Download
Podcast: Play in new window | Download
Reading Time: 2 minutes
On this episode of Intelligent Money Minute, we’ll be interviewing Shelly Hamilton on transitioning the family business. During this episode, Shelly is joined by her son-in-law and daughter, Adam and Megan Morgan. They talk about the hurdles, challenges, and considerations that took place when transitioning the family business to Adam and Megan. Shelly stresses the value of communication during the process and considering the feelings of others in the family.
Transitioning a family business is one of the most difficult things to do. When you factor in transferring a family business to another family member, you take the difficulty to another whole level. There can be hard feelings and difficult conversations. One of Intelligent Investing’s core values is Truth. We believe that speaking the truth in love is so vital…especially when it comes to talking within families. We strive to unite families with financial communication, and if you are going to be transferring your business in the near future (especially to another family member), we’d love to start having a conversation with you. We can help be the liaison between family members, and we can help you plan for the many aspects of transferring a business.
If you haven’t subscribed to our podcasts, you can go to our podcast page and choose whichever method you want to download them. While you are there, you can go to our blog page and subscribe so you can get our latest Intelligent Insights directly in your inbox.
Shelly Hamilton, the daughter of Frank Garlock, married Ron Hamilton aka “Patch the Pirate” in 1975. They have managed Majesty Music and written sacred music for children and adults since they joined the ministry in 1978. Shelly currently ministers at Majesty Music as pianist, composer, arranger, and recording producer. In 2013, their son killed himself after years of struggle with mental health issues. The family’s public struggle and acknowledgement of mental health issues has reached people around the world. Most recently her family faces a new challenge: Ron Hamilton’s early onset of dementia. Her insight and music will encourage anyone facing the challenges of life.
In January 2018 Majesty Music announced their third generation of leadership. After years of waiting for God’s timing, Ron and Shelly transitioned the ministry over to their son-in-law Representative Adam Morgan and his wife, Ron and Shelly’s daughter, Megan.
Podcast: Play in new window | Download