CRS Additional Information – Fees

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Jim Lorenzen, CFP®, AIF® Additional Information: What fees will I pay?

All IFG planning and investment advisory fees are fully disclosed and explained in writing with all questions answered before you enter into a planning or advisory agreement.  You will also be given a copy of my privacy policy and my written Fiduciary Oath. 

The concept behind the IFG fee structure is simple:  Ongoing services, i.e., financial planning and investment advisory services, use an ongoing compensation model.  Processes requiring few or no ongoing services, i.e., life insurance, are not charged ongoing fees and use a single compensation model. All fees are clearly explained in all IFG proposals and are mutually agreed upon prior to you becoming a client.

Compensation Breakdown:

Initial Introductory/Gap Analysis Meeting: Fee: $300. This is actually two meetings and includes all preparation and follow up to provide you with a detailed and informed analysis of your current situation. 

Financial Planning and Investment Advisory Fees:

I. Initial Financial Planning:  A completed financial plan is a requirement for becoming an IFG investment advisory client, this fee is quoted on a defined-project basis.  Upon completion of the gap analysis, you will receive a written proposal with everything clearly spelled-out. 

II. Ongoing investment advisory services with financial plan reviews and updates.  The two components of financial planning and investment advisory services go hand-in-hand at IFG and compensation for each is based as follows:

  • Assets Under Management (AUM) at $500,000 and above. 

· Financial planning:  A separate fee for financial planning review and update services is charged only for ‘held-away’ assets (those not covered by an IFG investment advisory agreement) with IFG’s planning fee discounted equal to the percentage of the client’s total financial assets being held at IFG.  Example:  If 75% of your financial assets are placed through IFG, your fee for the ongoing planning reviews concerning ‘held-away’ assets is discounted at 75%.  Obviously, if 100% of assets are placed through IFG, there is no separate fee for reviews and updates.  This structure ties IFG’s compensation not only to portfolio performance, but also to cost efficiency. 

· Investment advisory fees are paid according to the investment advisory fee schedule (below) which encompasses all ongoing financial planning review and update meetings and services for assets placed through IFG, including investment advisory services, encompassing ongoing due-diligence, monitoring, and client education. The investment advisory fee is asset-based and automatically deducted quarterly in accordance with IFG’s investment advisory fee schedule by the custodial firm and fully disclosed.

  • AUM below $500K: Once the initial plan is completed, semi-annual financial plan updates and reviews are charged at a rate of $300 per hour with a subscription retainer paid by bank ACH or credit card at $450 quarterly.  The separate investment advisory fee is asset-based and automatically deducted on a quarterly in accordance with IFG’s investment advisory fee schedule (below) by the custodial firm and fully disclosed. 
  • Financial Planning Only:  These are rarely accepted and on a very limited basis.*  Plan updates and reviews are charged at a rate of $300 per hour and provided on a subscription retainer basis paid by bank ACH or credit card at $450 quarterly. The initial plan fee still applies.
    .

PIFG’s investment advisory fee schedule** 

Annual investment advisory fees are computed based on asset balances and deducted on a quarterly schedule by the asset custodian (IFG does not take custody of client assets).  Quarterly fee deductions are fully-disclosed in advance and on client statements.  While IFG’s typical minimum asset requirement for investment advisory services  is $500,000 and typically open in excess of $1 million, IFG does reserve the right to waive this minimum in certain instances.

Investment Management Advisory Asset Based Fees1  
On the first $500,000 1.20%
On the next $500,000 0.70%
On assets above $1 million 0.50%

As you can see, as your asset size increases, the fee percentage declines.

Points worth noting:

  • Please keep in mind that all fees are subject to adjustment based on each client’s unique circumstances and goals. IFG’s working arrangement will be provided to you in writing after a needs/gap analysis has been completed.
  • Asset Custody:  IFG does NOT take custody of client assets.  Accounts will be in your name (or trustee you designate) at an independent third-party custodian, most often Pershing/Bank of New York-Mellon.
  • Referral Compensation Arrangements:  IFG does not pay or receive compensation, or any other material economic benefit, either directly or indirectly, involving any third party for recommending the selection or retention of professional services for a client.
  • Insurance services:  There are some instances, as noted above, where ongoing advisory fees would seem inadvisable.  For example: “fixed” insurance products generally do not require continuous or ongoing manager due-diligence, oversight, and portfolio review – therefore it would seem inconsistent to charge ongoing advisory fees.   Examples would include the placement of life insurance or fixed annuities, generally used when estate protection, charitable giving, or other needs when insurance products are either the only logical tool or an appropriate supplement available in the “financial toolbox”.  Insurance is provided under California license #0C00742.  In California, licensed agents are not allowed to charge fees for insurance placement and non-licensed professionals are not allowed to provide guidance on specific policies.

Financial planning fees can be paid by bank ACH or credit card and monthly or quarterly subscription fees can be arranged for certain services.

All fee arrangements, however, do contain inherent conflicts of interest.  I’ve addressed these here.  Of course, if you have any questions, you can arrange a call with me here or email me at info@indfin.com.

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*Generally limited to children and grandchildren of current IFG clients.

**Applies to IFG planning and advisory services only. Fees do not include advice on assets not covered under an advisory agreement, or third party fees or expenses which may be charged for custodial, management, or reporting by other third party providers.  This schedule does not include or apply to compensation for assets placed in insurance products required to fulfill a plan.  Annual fees are deducted on a quarterly basis by the asset custodian according to the schedule(s) outlined in the proposal and platform provider’s fee agreement(s). Clients engaged prior to January 2, 2021 may be paying fees that differ from this schedule for the same services. IFG’s ADV filing is available upon request.  All fees are subject to change without prior notice. However, clients must sign amendments to any agreements impacted by the fee changes.

Interested in becoming an IFG client?  Why play phone tag?  Schedule your 15-minute introductory phone call!

Jim Lorenzen, CFP®, AIF®

Jim Lorenzen is a CERTIFIED FINANCIAL PLANNER® professional and An Accredited Investment Fiduciary® in his 21st year of private practice as Founding Principal of The Independent Financial Group, a fee-based registered investment advisor with clients located in New York, Florida, and California. He is also licensed for insurance as an independent agent under California license 0C00742.  IFG helps specializes in crafting wealth design strategies around life goals by using a proven planning process coupled with a cost-conscious objective and non-conflicted risk management philosophy.

Opinions expressed are those of the author.  The Independent Financial Group does not provide legal or tax advice and nothing contained herein should be construed as securities or investment advice, nor an opinion regarding the appropriateness of any investment to the individual reader. The general information provided should not be acted upon without obtaining specific legal, tax, and investment advice from an appropriate licensed professional.

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20-Minute “Right Fit” Introductory Call Now!

Jim's picture
Jim Lorenzen is a CERTIFIED FINANCIAL PLANNER® professional and An Accredited Investment Fiduciary® in his 21st year of private practice as Founding Principal of The Independent Financial Group, a fee-based registered investment advisor with clients located in New York, Florida, and California. He is also licensed for insurance as an independent agent under California license 0C00742.

Schedule Your 20-Minute
“Right Fit” Introductory Call Now!