Why Flat Fees?

Historically, financial advisors charged clients either commissions or asset based fees. Throughout the 80’s and 90’s, there was a large movement away from charging commissions and high sales loads. The movement away from a commission structure has been a great win for investors, as it reduced conflicts and better aligned incentives.

Today, the typical financial advisor is compensated based on a percentage of assets (usually 1%). Charging 1% does not sound like a lot, but it adds up overtime!

An advisor managing $2,000,000 would charge an annual fee totaling $20,000.

Do you think your advisor does $20,000 worth of work? Maybe, but probably not.

Over the years, technology has changed the way portfolios are managed and produced huge economies of scale. In our experience, there is no appreciable difference between managing a $1,000,000 or $5,000,000 portfolio. Yet, most financial advisors charge vastly different fees.

Here is where we are different, WealthCollab has chosen a flat fee model. This fee fairly compensates us for the time and expertise it takes to develop a comprehensive plan and manage your investments. Enabling you to make smart decisions with your wealth.

The Economics of a 1% Fee

Based on a $2,000,000 portfolio growing at 7% for 30 years

14% Less Wealth After 30 Years
$2,954,477

Difference in Portfolio Value (Year 30)

$1,320,277

Fee Savings over 30 Years

Assumptions and Disclosures

Analysis based on a the following key assumptions:

  • Starting Portfolio Value: $2,000,000
  • Annual Return: 7%
  • Asset Based Fee: 1% based on annual beginning value and taken at the end of each year.
  • Flat Fee: Starting at $7,500 and increasing by 1% per year
  • Time: Projection for 30 years

This analysis does not assume any portfolio withdrawals. Tax considerations are not taken into account. This illustration is completely hypothetical and should not be used as the basis of any investment decisions. This analysis is not intended to be predictive of future performance. Individual investors may experience different results. Portfolio differences and fee savings are cumulative over 30 years.

Certain WealthCollab clients may pay a higher or lower fee than what is represented here as this is only meant for illustrative purposes. WealthCollab reserves the right to change or modify the fees charged to clients at any time.