The Ongoing Retainer fee is determined by our assessment of the complexity of the client situation, which begins with a no-obligation Introductory Meeting at which we discuss your current financial situation in some detail. The fee is not based on a typical Assets Under Management (AUM) calculation often associated with Fee-Only financial advisors, which we view as a very arbitrary (and usually more expensive) way to determine how much of our resources will be devoted to serving a given Client.
Our complexity assessment involves a detailed checklist of factors that require a commitment of our resources, knowledge and experience in servicing that client. The magnitude of assets involved and the level of overall household income are just two of many components that go into the calculation of the fee. In most cases, the fee, if converted to the equivalent of an AUM annual percentage, would run well below the 1% AUM benchmark that is often cited in the profession. In addition, if assets grow 20%, the fee will not increase in the same 20% proportion, as it typically would under AUM.
We have no asset minimums but our minimum fee is $333.33 per month, which is $4000 on an annual basis. Most client fees are higher than this minimum level. There is no maximum fee. The fee is assessed at the beginning of each month and starts as soon as the engagement is formalized by the signing of the agreement. It is the same amount each month. The fee can be paid from a combination of sources, such as retirement accounts (to the extent permissible), taxable investment accounts or by credit card.
Because the initial work is the most time-intensive for our staff (including extensive implementation assistance), we ask clients for a 9 month initial commitment to recoup most of the cost of our initial work. After that initial 9 month period, either party is free to cancel the Retainer agreement at any time upon written notice. The agreement automatically renews annually and the fee is subject to periodic review for changes in complexity, assets or income specific to the circumstances of a particular Client. In addition, the formula we use to translate complexity factors into the Client fee is subject to change over time.