How Does Your Wealth Advisory Firm Make Money?

July 27, 2018

How Does Your Wealth Advisory Firm Make Money?

Are you aware of the various ways in which a wealth advisory firm may profit from your relationship?

Below is a representative, though not necessarily comprehensive, list:

  • Advisory Fee: Typically, client is charged a percentage of the overall assets under management
  • Product Fee for internally manufactured products: Firm makes a product in-house, marks it up (adds profit), and sells it to the client
  • Product Fee for externally manufactured products: Firm gets access to another vendor’s product, sells it to the client, and typically earns a substantial rebate from the vendor
  • Commissions: Firm completes a transaction for the client (securities trading, sale of structured note, sale of an alternative investment, etc.), marks it up (adds profit), and charges the client accordingly
  • Portfolio lending: Firm lends its capital to the client, using the client’s portfolio as collateral; client is typically charged the firm’s borrowing cost (i.e. LIBOR plus a small spread) plus an additional spread (firm profit)
  • Trust services: Firm stewards a portfolio and/or estate on behalf of a client’s family; firm charges its cost to do so plus an additional amount (firm profit)

True Wealth Advisory Group provides all the above services and more, yet only profits from its client relationships in one way:

  • Advisory Fee: Client is charged a percentage of the overall assets under management

Hence, clients of True Wealth Advisory Group:

  • Benefit from the simplicity and transparency of only paying one cost
    • They don’t have to wonder in how many ways and how much is their wealth advisory firm truly charging them
  • Know the recommendations they receive are objective
    • They do not have to worry that their advisor is making a recommendation (even partially) to generate an additional revenue stream
    • They do not have to think about whether a “recommended in-house” product is truly best in class
  • Get Ultra-High-Net-Worth client services (transacting, borrowing, etc.) at true vendor cost
    • We cut out the middleman!

Which way of doing business do you prefer?

We are happy to engage with you, or someone you know, to compare services and costs or just to chat: simply click here”