There are financial advisors and then there are fee-only financial planners. It pays to know the difference when investing your hard earned money. Fee-only financial planners are registered investment advisors with a fiduciary responsibility to act in their client’s best interest. This is a big deal: “Fiduciary Responsibility” is a lot different than the obligation owed a client by the traditional financial advisor. The fee-only financial planner does not work on a commission basis or accept any backend fees (such as 12b-1 fees which go to “marketing” aka wining and dining commissioner advisors) for selling products to their clients. This is important because it allows the financial planner to offer unbiased advice to clients. They are not influenced by the commissions they will make on a given product because no fees are ever accepted. Fee-only financial planners are not conflicted in their advice and focus more on the overall financial plan rather than the
Financial advisors who operate on a commission basis try to defray their prospects skepticism about their practices by using a very confusing term. They now like to call themselves fee-based financial advisors. This is deceiving! It basically means they will charge you a fee BUT ALSO A COMMISSION! Who wants that!? This is deceptive marketing and completely characteristic of the hard and slick sales methods of the commission based contingent in our industry. I guess they do after all need to pay for their palatial office somehow. When you work with a firm like Jarus Wealth Advisors you can rest assured knowing we keep our overhead reasonable and don’t play fee pricing games. With us or any other fee-ONLY financial planner you will know what you’re going to pay from the outset of our relationship. orange county Fee-only financial advisors offer complete transparency.
Moreover the fees of commission-based financial planners are tied to specific products and types of transactions. The worst part is they have managers prodding them to sell particular products. Know this too, when they are told to sell a product they don’t go out and find the people that need it. Instead they go out to every client within reach and attempt to sell it without consideration for whether or not it’s the best option for that client. This is just not an ideal state of mind for a financial planner or wealth manager. In wealth management the advisor needs to be considering only the clients needs without any products in mind. Only after considering the client’s needs should the financial planner or investment advisor consider products.
As we wealth management firm Jarus Wealth Advisors LLC has developed a fee that allows us to easily manage all of our clients’ financial needs. Many of the services we offer go beyond investments and retirement planning. We work with the top estate planning attorneys in orange county to develop strategies that work for business owners. As CPAs we are able to seek out sound investment strategies that are tax focused. Many clients see tax as their single largest expense and this is an unfortunate reality. However this creates substantial planning opportunities that allow Jarus Wealth Advisors LLC to generate tax savings that typically are several times our fee. Our holistic approach and fee structure supporting the clients needs rather than being based on commission allow us to create financial plans true to our clients’ needs. This is something we are very proud of!
We primarily charge a percentage of AUM (assets under management) because of our desire to provide comprehensive wealth management. However we do have some clients who wish to have only a financial plan prepared for a flat fee and we’re happy to provide this valuable service.
For managed clients, we never bill on an hourly rate. We do not want clients to hesitate to contact us and feel it would inhibit the relationship and our service to the client. If there is an hourly charge many clients won’t call even when they should so that we can provide valuable input on whether to buy or lease a new vehicle, whether or not to buy a building for their business or continue leasing, how to finance a new home, etc. We love to receive these calls because it allows us to make a positive impact on our clients financial lives!
We hope this article has helped you to understand the advantages of fee-only financial planners in Orange County. If you have any questions whatsoever please fill out a request in our consultation form and we will be happy to give you a call to answer your questions.