Financial Advisors

Fee only advisors, what do you charge per session? I’m thinking of branching off and becoming an independent advisor versus my current role at a bank. I’m an advisor at Merrill Edge now

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Traditional - Wirehouses, Banks, b/d’s that provide infrastructure and support in exchange for a larger portion of the fee (i.e. 40% to the advisor, 60% to the b/d). Oftentimes they cover all the operating expenses , legal support and a salary for a period of time while you build their book of business. Independent - one can choose to go with a b/d that has an independent channel where you are responsible for expenses in exchange for a higher payout. As an independent you can choose a hybrid model which is beneficial to the advisor that desires to do fee based business and commission business. Another sub set of independents choose to go RIA where they can use a b/d or they can create their own. As an RIA you conduct only fee based business because they adopt the ideology that being a fiduciary is the way to go 100% of the time. Although I’ll provide a caveat - as an RIA you can get an outside business activity approved and earn commission for insurance products. Both hybrid and RIA advisors can charge planning fees in addition to charging a client a % based on AUM. This is what most do. Personally, I typically don’t charge the planning fee if the account is fee based and over $250k If it is commission or under $250k I charge a fee on a case by case basis. Before you jump, study the models and know what you’re getting into.

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You can't call yourself fee-only if you do choose to sell insurance as an RIA though.

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You will starve charging by the hour.

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There is literally firms all over the nation that do nothing but hourly or fee for service and make tons of money. Find what you prefer and roll with it.

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The fee is on a % of the assets. When you hear fee only, that is what is really happening.....it’s the RIA world. This is where everything is going and the wire houses are scared to death.

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FA2 spelled everything out perfectly. Great job!

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I thought the % of assets is the traditional model that’s used now, and fee-only is either an hourly or monthly fee not based on a percentage of assets? Please correct me if I’m dead wrong

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No, fee-only refers to a specific subset of advisors that only charge a fee for advice (usually as a percentage of revenue, and a separate fee for a financial plan), versus being “fee-based” meaning you charge fees, but might also earn commissions on the sale of insurance products or even be affiliated with a broker-dealer

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Weak...........FMF1.

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No what is happening is that producers are leaving the Merrill’s and going independent either the independent broker dealers with 90% + payouts or starting their own RIA’s and taking 100%.

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Lololol

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Where are you located? Happy to talk about the fee-only model, there are different options for billing but % of AUM is the most common.

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These are all great points, OP. Especially the comment about fee-only versus fee-based. To answer your original question about hourly rates, for example, our firm charges $299 for an hour-long college planning consultation and similar hourly rates for other sessions.

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So besides the $299 rate for consulting, what other services does your firm offer clients and how do you get compensated on those services ?

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Fresh Method Financial 1, you never answered my question. You made it look like your firm only charges hourly fees of $299 an hour. Please be transparent and let this gentleman know all the ways your firm gets paid.

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If you’re thinking about going fee only (I.e. charging a % of AUM), you’ll want to consider how much in AUM you’ll start off managing. Simple math should indicate (before figuring in expenses associated with running your own shop) whether it’ll be worth going 100% fee only, as you may not make as much in take home pay as you may think

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