We are fee-only. Our only compensation comes directly from our clients. Clients pay a flat annual fee that’s calculated based on net worth. The fee is paid in arrears on a monthly basis and is reset annually to reflect changes in net worth. Our fee schedule is below.
* Minimum of $300 per month
For comparison purposes, the standard advisory fee is 1% of assets under management (AUM). That translates into $10,000 per year for a $1 million portfolio. Most advisors who provide financial planning also often charge an additional planning fee between $1,500 – $10,000+ per year.
AUM pricing creates an issue for two profiles of people: those with few investable assets and those with substantial investable assets. Young professionals often have higher levels of income, but little in the way of investable assets. At a time when they need planning and advice, many firms won’t work with them because they don’t meet a minimum asset level.
Alternatively, people with substantial assets typically have a hard time paying an annual fee of $50,000 (1% of $5 million) or more. That is a tough pill to swallow for many clients to swallow, though it highlights why most advisors charge in this manner. It’s too lucrative to give up.
We work well with high-earners who don’t yet have a lot of investable assets because we don’t have an investment minimum. On the other end of the spectrum, our tiered fee benefits clients with substantial assets because they pay far less than 1%. For example, assume the same hypothetical client with $5 million in investable assets has a net worth of $6 million. At Mountain River, that client would pay $18,000 per year (0.3% of $6 million) as opposed to the $50,000 per year (1% of $5 million).
Click here to learn more about fixed-fee pricing and why it’s a fairer way to pay for advice.