The Importance of Understanding Fees
Most wealth management firms use one of the following compensation models.
1.) Product Commissions – Including brokerage, retrocessions or other kickbacks, this model focuses on the sale of a financial product to be compensated
2.) Fee for Service – Is a fully disclosed pre-agreed fee paid by the client to be continually advised and serviced in an ongoing financial relationship
At The Capital Company, we believe that compensation drives behavior in financial advice and determines the type of relationship clients have with a wealth management firm.
The more a client seeks commission based products as a solution, the less they will receive unbiased ongoing financial advice.
Solid financial advice is built on trust, and trust is an equation.
Transparency + Alignment of Interest = TRUST
Evidence shows repeatedly that high cost products and structures with opaque or complicated fee disclosure don’t deliver the best investment outcomes. The index securities used to implement Evidence Based portfolios are inherently very low in cost and enables our firm to mitigate the fee and cost drag on performance. This simple endeavor captures more returns for clients.
Our Fee Structure
We charge up to 1.5% per annum of assets under management with a sliding scale based on account size. Performance quoted after fees is important to determine the true value of a portfolio manager.