Jump to content

Investment Management

Maintain Oversight of Your Advisor

Learn More
  • Flat Fee Only

  • At Burnside and Co., we have come to realize that it is not in the client’s best interest to be charged the industry’s typical Assets Under Management (AUM) fee. This is what you see at "Fee Only" Registered Investment Advisors.

    WE ARE PIONEERING A BETTER WAY

    Flat Fee Only

  • What’s an Assets Under Management (AUM) fee?

    It’s when a "Fee Only" Registered Investment Advisor charges a percentage of assets for their help. If a client has a $1,000,000 investment account, and the advisor charges the industry standard 1%, then the client pays an annual fee of $10,000.

  • What's wrong with AUM fees?

    CONFLICT OF INTEREST EXCESSIVE FEES CHARGING FOR SERVICES NOT BEING USED

    PROBLEM

    There is a disconnect between the fiduciary responsibilities of investment advisors and AUM fees.

    Advisors get paid based on the size of their managed investment accounts. Therefore, a strong natural motivation is present for advisors to encourage clients to keep assets invested.

    Possible Conflicts Include:

    • Paying down debt
    • 401k Rollovers
    • Buying alternative investments

    Typically, serving a $500,000 account takes the same amount of time that it takes to serve a $1,500,000 account. Why then is the $1.5 million dollar account paying three times as much?

    • $500,000 x 1% = $5,000
    • $1,500,000 x 1% = $15,000

    Put another way, it certainly doesn’t take triple the time to serve the larger client.

    To justify higher fees, many registered investment advisors will argue that “Retirement Planning” is included in the AUM fee.

    But not everyone needs a Comprehensive Retirement Plan with analysis of insurance, estate planning, and other niche needs.

    And if they do, why not talk to an insurance agent and/or an estate attorney?

    SOLUTION

    Pay an annual flat fee for a professional and prudent investment process.

    Since the advisor is no longer compensated on the size of a client’s account or where it is held, they aren’t conflicted with how clients utilize their assets. This results in more reliable advice. The flat fee is based on the average number of hours it will take to service a specific client. Therefore, potentially a $500,00 client may be charged the same amount as a $1,500,000 client. Retirement Planning is included in our hourly estimation process.
  • How Flat Fee Pricing Works

    Burnside and Co. has developed a fiduciary investment process, Burnside OS (Burnside Oversight System™), that all clients utilize. This process has built in efficiencies but also allows for some customization.

    We estimate how many hours a month it will take to run a client’s specific portfolio and financial needs through our process. The client’s annual flat fee (charged quarterly) will be the estimated hours per month x 12 months x our hourly rate.

    Once the Flat Fee is set, cleints can have peace-of-mind knowing that they will obtain true fiduciary insight.

    Hours per Month Hourly Rate Annual Flat Fee
    1 $150 $1800
    2 $150 $3600
    3 $150 $5400
    4 $150 $7200
    5 $150 $9000

    Annually, we review the estimated hours per month to see if it needs to be adjusted up or down. Any change needed is communicated with client.

  • Contact Us

    John Burnside, AIF® PPC®

    Burnside and Co.

    Registered Investment Advisor

    312 NW 10th Avenue, Suite 200

    Portland, OR 97209

    503-658-3138

    john@burnsideandco.com

    Burnside OS Process
×
×
  • Create New...