FEE-BASED INVESTMENT ADVISOR - Aaron Brask Capital

In addition to transparently presenting the fees for our services below, we believe it is important for prospects and clients to understand the incentives behind various fee structures. Accordingly, we have included some of the pros, cons, and incentives involved with each approach to fees.

Whether it is a percentage fee schedule based on assets under management or a fixed-fee engagement, our fees reflect the nature and scope of work we anticipate. Here are some of the factors we consider when setting our fees:

Tax filing status (e.g., married vs. individual)
Current and anticipated working status
Business ownership and corresponding retirement plans
Number and types of accounts (brokerage, IRA, Roth, inherited IRA, etc.)
Number and types of assets (stocks, bonds, funds, real estate, etc.)
Number and types of financial products (life insurance, annuities, etc.)
Charitable giving strategies
Plan for legacy wealth (e.g., leave to kids vs. multi-generational goals)
and more …

Percentage of Assets (a.k.a., AUM fees)

When serving as your Personal CFO (comprehensive financial planning, portfolio management, etc.), our fees are typically charged as a percentage of the assets we manage on your behalf (i.e., assets under management or AUM). Our standard fee schedule starts at annual rate of 1%, but is lower for assets exceeding thresholds as highlighted in the table below. Please client on the section below to view our standard fee schedule, which includes two examples to illustrate the fee calculations.

Assets under management	% Fee (minimum annual charge may apply)
Assets up to $1,000,000	Charged at 1.0% per annum
Further assets up to $5,000,000	Charged at 0.75% per annum
Further assets up to $10,000,000	Charged at 0.50% per annum
Assets in excess of $10,000,000	Charged at 0.25% per annum

Notes

The fees above are quoted at an annual rate (e.g., 1%), but are billed quarterly at a rate that is precisely one-fourth of the annual rate. We provide to examples below.
The fee schedule above applies to clients who require standard financial planning and investment management services.
The anticipated scope and complexity of the work may occasionally warrant higher, lower, or fixed fee arrangements. This would be discussed and agreed upon prior to engagement.

Example 1: The quarterly fee calculation for a hypothetical $1.0 million portfolio would be 0.25% (1% ÷ 4) x $1.0m = $2,500.

Example 2: The quarterly fee calculation for a hypothetical $1.5 million portfolio would be calculated in two parts. The calculation for the first $1.0m of the portfolio is identical to the calculation above. We would then calculate the fee on the additional $500,000 at the marginal rate of 0.75%. That would be 0.1875% (0.75% ÷ 4) x $500,000 = $937.50 for a total quarterly fee of $3,437.50 ($2,500 + $937.50).

Pros

This is our most popular fee structure. It is transparent and aligns our interests in wanting to preserve and grow your wealth. These fees are calculated and deducted from your accounts by the custodian where your assets reside (i.e., Charles Schwab).

Clients with pre-tax accounts (e.g., traditional IRAs) may benefit from an effective tax break as they do not have to pay taxes on fee distributions.

Cons

Charging fees as a percentage of assets is more expensive for those with more assets.

Incentives

This fee structure creates a monetary incentive for me to preserve and grow your assets since my fees increase and contract with the value of your portfolio.

Here are two links describing what it means to be fee-based investment advisor:

Hourly & Fixed Fees

Our hourly rate is $375, but we find most people prefer fixed-fee engagements. In these cases, we estimate the scope of work required and propose the fixed fee prior to engagement.

Examples

Fixed fees for financial plans focused on retirement typically range from $3,500 to $7,500, but are ultimately based on the time required to build and optimize your plan. He highlight some of those factors on our DIY Guidance page.
Financial plans that involve estate taxes, irrevocable trusts, or other challenges beyond traditional retirement planning typically have higher fees.

Pros

This fee structure is transparent and the fixed-fee approach allows clients to know precisely how much they will pay. This is good fit for DIY types who would like a financial plan or occasional guidance, but are comfortable managing financial planning logistics (portfolio rebalancing, tax gain/loss harvesting, Roth conversions, etc.).

Cons

An hourly rate might make some people feel like the meter is running. Others may not like to pay out-of-pocket and prefer more indirect payment methods (e.g., automatic deductions from their portfolio or a commission-based arrangement).

Incentives

Engagements billed at an hourly rate could encourage us to work at a slower pace. Moreover, fixed-fee engagements could encourage us to work faster and/or provide lower quality deliverables.

Note: We typically do not bill clients for hourly or fixed-fee engagement until they are 100% satisfied.

Here are two links describing what it means to be fee-based investment advisor:

The Bottom Line:

We believe we provide a high level of service at a competitive price. Moreover, we make our fees and services transparent so you can understand and select the option(s) that make the most sense for your situation. If you have any questions, please get in touch.