We are fee-only. Our only compensation comes directly from our clients. Personal CFO clients pay a flat annual fee that’s calculated based on net worth. The fee is paid in arrears on a monthly basis. It is reset annually to reflect changes in net worth. Our fee schedule can be found below.
For comparison, the standard advisory fee is 1% of assets under management (AUM). That translates into $10,000 per year for a $1 million portfolio. Additionally, most advisors who provide financial planning will charge a separate planning fee ranging between $1,500 – $10,000.
This fee structure creates a major issue for two types of people: those with low levels of investable assets and those with substantial investable assets. Here’s the problem. Young professionals often have higher levels of income, but little in the way of investable assets. At a time when they really need planning and advice, most firms won’t work with them because they don’t meet the firm’s minimum asset level.
Alternatively, people with substantial investable assets typically have a hard time justifying paying an annual fee of $50,000 (1% of $5 million) or more. And we agree. That is an absurd amount to pay, though it highlights exactly why most advisors charge in this manner. It’s just too lucrative to give up.
Our fee is structured so that it eliminates both of these issues. We can work 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 (and higher levels of net worth) 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 just over $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) they would pay an advisor with a standard fee!
Click here to learn more about fixed-fee pricing and why it’s a better and fairer way to pay your advisor.
** Minimum of $175 per month.