Broker Check

Fee-Only Planner

At Executive Financial Servcies, Inc., we strongly believe that fee-only investment management offers the best combination of advice and ongoing management, with the greatest assurance of unbiased, no pressure service.

We are a fee-only investment practice. With a fee-only advisor you get personal service, an individualized portfolio and ongoing management. You pay a set fee for our service, usually a small percentage of your assets being managed. There is also typically a minimum asset value for accounts.

Unlike full-commission brokers, whose compensation is tied to trading activity or the sale of investment products, fee-only investment managers provide customized advice designed to help you meet your financial objectives. You and your advisor have the same goal: to help increase your net worth and achieve your overall investment objectives.

Because we are paid according to the assets we manage our incentive is to grow the account instead of generating new clients to sell products. Being a fee-only advisor we will work hard to maximize your portfolio performance because we receive more income as your account grows.

Why is it better?
We charge a reasonable management fee based on the value of your account.

Fee only compensation eliminates the potential conflict of interest that may otherwise exist. A stockbroker or commission based planner gets compensated by charging commissions for products that are sold. Stockbrokers often charge 1% - 2% per trade on stocks, and as much as 6% on mutual funds. This creates an incentive to produce many transactions. All of the emphasis is placed on making sales; otherwise the broker will go out of business. Stockbrokers may also have hidden charges such as 12b-1 fees or surrender fees on mutual funds, surrender fees and high internal expenses on annuities, and heavy markups on products like unit trusts or bonds. Another huge conflict exists when the brokerage firm also performs investment-banking activities. In this situation the firm has a fiduciary obligation to the company whose securities are being marketed. In efforts to market a client’s stock, the brokerage firm must have an inventory of this stock, and will typically pay a higher commission to their brokers to sell it. After all, the brokerage firm doesn’t want to hold the stock in its’ own inventory. It must sell it. You may never know that this situation exists when your broker calls you to recommend a company that the firm’s analysts call a "strong buy."

On the other hand, as a fee-only advisor, we are compensated to provide you with on-going service and management - not to make a "sale." In a nutshell, we prosper only if you prosper. Our compensation is a flat percentage of your account, and all of the conflicts of interest discussed above are eliminated.

Standard Payments for Services
There are three basic ways you can pay for investment help: by the hour, by a set fee or by commissions.

Specific advisory services such as evaluating your overall financial needs, developing a comprehensive financial plan or developing an asset allocation plan are usually billed on an hourly basis. Fee-only advisors charge either a set fee for services rendered or a fee, usually 1- 2%, based on a percentage of the assets under management. (We charge .5% - 1%.)  A commissioned advisor gets paid on a per transaction basis by the companies whose products he or she sells.

For ongoing management, the type of payment arrangement you have is important because of the issue of sales pressure. If an investment advisor is compensated solely by commissions or is affiliated with a firm that offers only it’s own proprietary investments, you’ll want to know the implications of this arrangement and get assurances that this will not influence decisions made for your account.