A fee-based investment is an investment product recommended by an investment advisor representative where the client pays an annual fee instead of a commission for the advisor’s recommendations.
This product is offered by investment advisor representatives who are also registered representatives that work for various size brokerage firms like an LPL, Merrill Lynch or Ameriprise. The product is often referred to as a wrap program, which means investments outside of the wrap program may have a commission associated with them like a variable annuity, mutual fund or insurance.
The wrap fee is a percentage of the assets under management between 1% and 2%.
Fee-based investing was created by Wall Street brokerage firms to compete with fee-only registered investment advisors and perhaps confuse or blur the lines between the fiduciary standard and the suitability standard.
For example, a red flag is if you asked someone if they are a fee-only, fiduciary advisor and they say they are a “fee-based” advisor they aren’t really a fiduciary. In reality, a fee-only advisor is compensated ONLY giving advice and can’t receive a commission on the sale of a product.
A fee-based advisor actually wears two hats. One as a commission-based salesperson and another as someone who can charge you an annual percentage via a wrap account. Unfortunately, the client can never be sure what hat they are wearing–creating a conflict of interest.
A fee-only advisor is an independent financial advisor who follows the fiduciary standard and must always recommend what is in the client’s best interest. They are not employed by any brokerage firm or other financial institution. A fee-only adviser charges you an agreed-upon fee (i.e,. hourly, retainer or a percentage of your investment assets) and does not take commissions from companies that sell investment products.
These individuals are required to act in their client’s best interests and must disclose all fees upfront and any conflicts of interest. This type of advisor can provide unbiased financial advice that is not influenced by commissions.
If you’re looking for someone to provide this type of counsel, then our fee-only investment management services may be the right choice for you.
Are you considering getting started with investing or looking to reshuffle your portfolio? If yes, then getting advice from the right team will help. This is where we come in.
At Interactive Wealth Advisors (IWA), we provide a range of fee-only advisory services. We believe that this is the best way to provide our clients with personalized financial advice that is based on their specific needs and goals.
Our advisory services include financial planning, portfolio management, estate planning, and IRA investment. We also provide tax planning services in Oregon, stock option planning, asset protection planning, and lots more.
We can help you with as little or as much as you need. This comprehensive approach means that we can help our clients with all aspects of their financial lives.
We work together with our clients to develop a strategy that is based on their requirements, goals, and objectives. We create a customized plan for them and monitor its effectiveness on an ongoing basis – and then we tweak it when necessary.
So whether you are ready to start investing or you are looking for social security and retirement planning, contact us today. We would be happy to answer any questions you have.
When it comes to fee-only investment management, there are a few key things you should keep in mind.
You may be wondering if fee-only investing is right for you. This type of investment management firm is ideal for
If you need help determining whether this type of service is right for you, we can help. Get in touch so we give you an overview of the pros and cons so that you can make an informed decision.
There are a lot of financial advisory services out there. So why should you choose us? Here are a few reasons:
If you’re looking for an investment advisor that puts your interests first, contact us today. Our advisors can help you develop a plan that fits your needs and goals.
Call (503) 575-1953 to speak with a financial advisor today.