Taken from WELLth’s LinkedIn
I had a few objectives in mind when I founded WELLth Financial Planning. The most controversial of the bunch?
I want to break the traditional “assets under management” (AUM) fee so prevalent among my competitors.
Typically, financial advisors will charge based on a percentage of the investments they manage. This method of charging is wildly profitable, given that your typical stock or bond portfolio generally increases in value over time. The markets tend to go up over time and so does your fee.
Here’s a different thought. Why don’t we pay advisors based on the work they do — hourly, fixed fee, or by project? My accountant, plumber, mechanic, and doctor all charge this way. If the project is complex, they’ll charge me extra. That’s fine.
Finally, in my opinion, the client loses in an AUM fee environment. For those without significant assets (who would pay less), advisors often set investment minimums, restricting access to quality financial planning. And, of course, for wealthy clients without complex needs, an AUM fee can quickly soar into the tens of thousands of dollars for potentially little work.
Christopher Diodato founded WELLth Financial Planning in 2020 to help individuals live their best financial lives through expert, conflict-free guidance. He carries a rare combination of credentials — the CFA, CMT, and CFP charters — allowing him to create and implement best-in-class investment and financial planning strategies. A passionate advocate of the FIRE movement, Chris helps clients design life plans that reflect their unique vision of financial success, whether that means early retirement or more time for what matters most.