What’s the difference between fee-only and fee-based?

Fee-only means you pay for services directly to the advisor. You might pay a management fee based on the amount of assets the advisor manages, or an hourly fee, or a retainer. Fee-based is a different thing entirely. It means the advisor is accepting commissions, or bonuses, or a flat fee paid by the investments they sell, as well as charging you a periodic fee for management. You may get a discount on trading fees or commissions charged, but this is not a fiduciary arrangement. Be very careful! this is sometimes designed to lull the consumer into trust by confusing terms.

What’s a fiduciary?

Fiduciary means that advice you receive must be in your best interests. As an advisor who is a fiduciary, that means I don't accept or pay commissions, finder's fees, or referral fees. Any advice or recommendations that I make carry no incentives or compensation of any kind, beyond the fees you pay directly to me. So why does it matter? Let's say the right recommendation for you would include an investment in a large company mutual fund. As a fiduciary advisor, I would recommend a no-load mutual fund that had excellent performance and low internal management fees (charged by all funds). That would be in your best interests, because the cost would be rock-bottom low and the quality high. If you went to a non-fiduciary (e.g., a stockbroker or other salesperson), the recommendation could be a large company mutual fund that paid a commission to the "advisor". That person would not need to consider the level of internal management fees. They would only need to determine that the investment was "appropriate" for you, a much lower standard of care. Someone who accepts commissions is most likely going to prefer the fund that offers the highest commission, not what saves or makes you the most money. Fiduciary is a very important factor, and any advisor should be willing to sign a statement as to whether they are a fiduciary. I'll sign one, gladly.

How do you charge?

We charge for our services in several different ways, designed to meet your needs for specific services. The initial consultation (up to 45 minutes) is $150, payable at the first meeting. When you decide to engage us, the $150 is applicable to your total fee. We offer: Customized fee-only advice, by the hour: We can work with you on an hourly fee basis (at $300/hour) in just the same way as other professionals such as lawyers and accountants. Each project is unique, but some typical charges are:
  • A comprehensive financial plan examining your investments, retirement planning, risk management, income tax strategies, estate planning and if applicable, college financial planning, usually takes about 7-15 hours. This is our most popular service and the place where most people should begin.
  • If you want advice on a specific issue, for example evaluating your retirement plan, portfolio opinion, college financial planning, investing an inheritance or any other consultation, usually this can be accomplished in 4-8 hours.
  • Divorce financial planning charges depend on your needs. If the project is analyzing settlement offers and projecting benefits and drawbacks, we are usually able to give you a firm project price based on our hourly fees. This service usually ranges from 7-15 hours. If, however, your case is more complex, we require a retainer and will bill you monthly if the retainer is expended. Our minimum retainer in this situation is $2,000. If you are seeking assistance with post-divorce financial planning, either hourly or asset management services may be appropriate.
We offer asset management if you need ongoing monitoring of your investments, help in selecting investments, and want access to regular advice and updating. We use the same types of portfolios as we would recommend on an hourly basis; the difference is that we handle the details for you, and act as an ongoing resource for your questions and implementation of your investment plans. This service includes a full financial plan and regular updates. Fees are automatically billed quarterly to your account as a percentage of your assets that we are managing. There is no minimum asset requirement--we will manage any portfolio--but our minimum yearly fee for this service is $4,000.  

What is your investment philosophy?

We recommend that clients have a balanced portfolio of well-diversified assets that is consistent with the client's risk tolerance, stage in life, goals, and investment knowledge. We typically recommend portfolios of index mutual funds that are no-load, rebalanced annually, and have low management fees. Generally, we do not recommend, evaluate, or manage individual stocks on an ongoing basis. However, personal behavior can impact the success of any investment program. As part of a prudent investment strategy, we recommend that clients build up an emergency fund, have a plan for paying off any debt, and have a plan for managing cash flow that allows saving a significant portion of income.

When can you be reached?

The office is open Monday through Friday from 10:00 am to 5:30 pm. We make every effort to return calls and emails within one business day. If you call after-hours or on weekends, we will try to contact you the next business day. If you leave a voice mail message, it's very helpful if you also leave your email. Please understand that during business hours we may be meeting with clients and unable to respond immediately. We'll treat you and your project with the same careful attention. You are welcome to drop off materials. However, please call first.

Where are you located?

We are located in Evanston, Illinois, a suburb which is immediately north of the city of Chicago. The office is in a private and quiet residence just east of Ridge Avenue and west of Chicago Avenue. The entry has a flight of stairs and is not handicapped-accessible. If you have mobility issues, please contact us to discuss alternate meeting arrangements. Parking is available on the south side of Oakton Street, and we are about two blocks from the South Boulevard stop of the CTA Purple Line.

When do you schedule meetings?

Our business hours are 10:00 am to 5:30 pm, Monday through Friday. We can schedule meetings first thing in the morning, during your lunch hour, or toward the end of the day, or whatever fits best in your schedule. We do not have evening or weekend hours.