Fees – Masdevallia Financial Advisor Services

My rates are 0.75% of Assets Under Management (AUM) per year. Please see Detailed Fees for an in-depth explanation of exactly how fees are calculated each month. These fees are automatically deducted from your account each month so you’ll never write me a check by hand.

Masdevallia LLC would cost approx $63 per month per $100,000 invested.

These are my rates for all clients at all investment levels. The minimum investment to start service is $50,000. If you’ve reviewed other advisors you’ll realize I’m among the lowest cost and most accessible in the business. Later I’m going to help show you how to find the rates other advisors charge for service as well so you can see it for yourself. It’s all publicly available but many of them don’t disclose their rates on their sites.

Deep Value

So why are my fees so low compared to other financial advisors listed below? Well, I looked at what it would cost to operate an actual office and thought about it in relation to how many clients I’ll have when the practice is full. I realized I’d have to charge about $200 per client per year to cover all the expenses needed. As we only meet together 2-4 hours a year in person the thought of spending $50-$100 per hour when we’re talking face to face seemed like a wasteful use of your money. You keep that money for yourself. I can efficiently meet clients online just as easily as having them wait in an office. I don’t have any bosses over me that need to be paid and no one else on staff so my total costs are low.

I also take my duty as your fiduciary seriously and if I charge you a quarter percent less per year over decades that means thousands of extra dollars you’ll get to keep growing. If I charged you 1.5%, the way some of the big brokerages do, then strategies that involve very safe very predictable bonds stop making a lot of sense when those investments only give you about 2.5% return. After inflation and a high 1.5% management fee you’d be losing ground to inflation investing there. At my cheaper fee of 0.75% with inflation, you’d at least be able to hold steady in your purchasing power, or very close to it.

The Others...

I personally find it an extremely frustrating experience to look at a service you’re interested in and not have the price listed anywhere. I find that doubly infuriating when it involves something as important as your life savings so I’m doing something about that. I want you to have as much information as possible when you make major decisions in your life so I’m showing you my rates and what the big name providers charge, for the products I think are the closest to what I do.

Rates quoted are as of May 23rd, 2019

Fidelity charges 1.50% of assets under management per year for their Fidelity Wealth Services Program, for the first $500,000. Minimum of $250,000. This seems like a true personalized financial advisor relationship and it sounds like they offer you a financial plan built just for you. This is closest to what I offer except it’s double the price.

Fidelity would cost you approx $125 per month, per $100,000 AUM.

Edward Jones charges 1.35% of assets under management per year. If you want someone to actively monitor and make trades on your behalf they charge an extra 0.09% for the first $250,000 in their Edward Jones Advisory Solutions product. You have an advisor who helps you pick from a menu of 90 predetermined strategies and then you let them actively manage the funds based on the strategy picked. You get statements and quarterly reports that seem to show you the history of how they auto rebalance the account to match the strategies and a meeting once a year with an advisor. No financial plan is included.

Edward Jones would cost approx $113 per month per $100,000 AUM

Charles Schwab charges 0.80% of assets under management for their Schwab Private Client product. The minimum investment for this one is $500,000 to even have as an option, they don’t actively manage the portfolio for you, and won’t make you a financial plan. They’ll take the time to make personalized recommendations for you and then hand that advice over to you to implement on your own or ignore. Every quarter they’ll come back and look at how the investments are setup and offer updated recommendations. I think for 0.8% of your money each year you deserve an advisor looking at your portfolio more than 4 days a year and should have someone experienced execute the plan for you. The timing of when you buy and sell investments does make a difference and if they’re advising you to pick new products you’re not used to investing in you’ll be more likely to make timing errors.

Charles Schwab would cost approx $67 per month per $100,000 AUM

Small practice financial advisors that I’ve looked at have all charged between 1 and 1.5% until you get into balances over $1 million, but each practice will set its own prices. Most of the small practices I’ve reviewed have similar offerings of personalized financial plans, access to an advisor year-round, and then extra specialties like tax planning or estate planning as well. Half the advisors I’ve personally met in my travels have started out their career in insurance and transitioned to being a financial advisor so they can sell annuities as part of their practice. I feel very strongly that annuities are a bad choice for nearly everyone, except a specific kind of annuity, once you’re over 80 years old, and only if you’re in danger of outliving your savings. If you feel I’m not a good match for you and you’re shopping for other advisors please take the time to see if the advisor you’re interested in sells annuities and proceed with caution if they do. You can find this information in their Part 2 brochure as well, which I’m going to show you next.

Small practice advisors would cost approx $83 – $125 per month per $100,000 AUM

Seeing With Your Own Eyes

How do you see for yourself what financial advisors charge for services? You’ll want to follow this link to Investment Advisor Public Disclosure page by the SEC. From there you can enter any specific financial advisor’s name or you can enter the name of the firm and the zip code near them to make sure you zero in on the right practice. For example to see my practice you would search for Masdevallia LLC. Click on the ‘Get Details’ button next to the name of your practice. There you’ll see information about their practice and you’ll want to go to the Part 2 Brochures. Small practices will probably just have one to view, but big brokerages with a few different products may have a couple for you to pick from.

What service costs

The Others...