What does 'Fee-Only' mean? Why should I focus on the cost of my financial advice?
Costs are something YOU can control.
Investment returns are largely out of your control.
- Costs matter.
Sometimes small differences can have a big impact on how hard your money works for you.
Take this example: you invest $5,000 in 2 different mutual funds. Both mutual funds earned 7% over 5 years. Mutual Fund A had an expense ratio of 1.21%. Mutual Fund B had an expense ratio of 0.34%. At the end of 5 years, Mutual Fund A would be worth $6,600 and Mutual Fund B would be worth $6,895. That's a difference of almost $300. Over time, the difference gets even bigger.
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Why Fee-Only?
Go back to the example above. In some cases, some of that $300 from Mutual Fund A was paid to the banker or broker who told you to invest in Mutual Fund A. Did the banker or broker tell you that? Why weren't you told about Mutual Fund B?
As a Fee-Only advisor, we do not earn additional money by telling you to invest in Mutual Fund A. (Even if we did receive that $300, we would tell you about it up front and explain that it may influence our advice to you. That's an example of fiduciary responsibility.) You pay us directly and we will give you estimate of your costs before any work begins. It is simple, straightforward and allows us to be objective.
What is a Fiduciary and why is it important?
As a
CERTIFIED
FINANCIAL
PLANNER™ Practitioner, we take our fiduciary responsibility very seriously. This means:
- we act with undivided loyalty to our clients - your needs come first
- we don't sell financial products; we provide information, advice and knowledge
- we work independently to provide sound and objective financial advice. We don't represent a financial institution (whose primary goal is often to sell financial products).
- We disclose all charges fully and up-front, and inform clients of any conflicts of interest.
