What’s Your Service Level?
I follow a few financial planners on Twitter and last week two of them were going back and forth (in a positive interaction) tweeting about how service levels differ between financial planners, advisors and salespeople. One of them, Carolyn McClanahan, has a graphic on her website comparing her services to asset-based advisors and commission-based advisors. I thought this was great as I frequently get people asking me what the difference is between what I cover with my clients and the typical financial advisor. It is so great I created my own and figured it was worth sharing to illustrate what comprehensive financial planning looks like in my world.
| Forward Thinking Wealth Management | Asset-Based Fee Advisor | Commissioned Salespeople | |
| How Compensated | Flat Retainer | Percentage of Assets (Often 1% or more) | Commission varies by product |
| Annual Client Cost | $4,800 | Example: $1 million portfolio = $10,000 | ??? |
| Fiduciary Duty | Yes | Yes | No |
| Portfolio Analysis | Yes | Yes | ? |
| Ongoing Investment Management | Yes | Yes | ? |
| Financial Plan Development | Yes | ? | ? |
| Goal Setting and Monitoring | Yes | ? | ? |
| Tax Minimization | Yes | ? | ? |
| Retirement Analysis | Yes | ? | ? |
| Retirement Income Planning | Yes | ? | ? |
| Social Security Optimization | Yes | ? | ? |
| Estate Planning Review | Yes | ? | ? |
| Insurance Review | Yes | ? | ? |
| Student Loan Review | Yes | ? | ? |
| Education Planning | Yes | ? | ? |
| Mortgage Review and Assistance | Yes | ? | ? |
| Health Care Planning | Yes | ? | ? |
| Employee Benefits Analysis | Yes | ? | ? |
| Behavioral Finance Guidance | Yes | ? | ? |
| Coordination with Attorney, CPAs, etc | Yes | ? | ? |
| Unbiased Advice (not influenced by compensation) | Yes | ? | ? |
| Receipt or Payment of Referral Fees | No | ? | ? |
| Account Aggregation & Portfolio Monitoring Software | Yes | ? | ? |
| Weekly Contact by Advisor | Yes | ? | ? |
| Virtual Advisor (Can work with clients anywhere) | Yes | ? | ? |