Fiduciary Financial Advisor for Santa Barbara & Los Angeles
Affordable Sliding Scale Fee Model - "Pure" Fee-Based Practice
'Pure' Asset-Based Fee Practice - A declining advisory rate schedule
We offer Free Complimentary Initial Portfolio Reviews.
It is our goal to keep our "pure" fee-only practice competitive and we have found that that our clients understand the value-proposition between fees paid and the comprehensive financial, portfolio, retirement and estate planning services we continually provide. We also very much hope to have an opportunity to convey the value of our services to you.
Our active advisory fees start at 1.0% of assets managed, declining to a low of 0.6% of assets for the highest net worth bracket of actively advised accounts (fee chart is provided at bottom of page). Studies show these advisory fees are approximately 30% lower on average than the overall financial advisory industry and are also in the bottom quartile for fee-based distribution for advisors. In fact, 25% of advisors charge more than 1.75%, while 30% charge more than 1.5% - which is exorbitant.*
It is also important to recognize that industry research has shown that professional advisory services add value to client portfolios. For example, two different studies by both Evestnet & Vanguard found advisors beat market benchmarks by an average of +3% a year, with Evestnet finding tax benefits alone add up to more than +1% annually over the broad market (for 1995-2014 period). Similarly, the Vanguard study found advisors overall added +3% each year with portfolio construction, behavioral coaching (e.g. avoid emotional investment decisions like panic selling) and wealth management. Perhaps this added-value is why client satisfaction with financial advisors is amongst the highest relative to all of the industries monitored by the American Customer Satisfaction Index (ACSI).
Fortunately, traditional investment advisory fees on taxable assets managed generally can also be considered tax deductible under "miscellaneous investment-related itemized deductions." Miscellaneous itemized deductions are generally limited to the amount of expenses over and above 2% of your adjusted gross income (AGI). In other words, there’s a floor below which you lose the ability to deduct. The point being is the real cost of advisory fees are typically further reduced with itemized write-offs (please consult with your tax specialist).
Below, please find the declining fee rate model for the respective asset brackets. The minimum asset value of $250,000 is largely driven by the diversity of asset classes and individual holdings employed for portfolio risk management, along with the respective purchase minimums for select mutual fund investment vehicles (when applicable, as portfolios also include individual stocks, individual bonds and exchange traded funds [ETFs]).
We offer Free Complimentary Initial Portfolio Reviews.
It is our goal to keep our "pure" fee-only practice competitive and we have found that that our clients understand the value-proposition between fees paid and the comprehensive financial, portfolio, retirement and estate planning services we continually provide. We also very much hope to have an opportunity to convey the value of our services to you.
Our active advisory fees start at 1.0% of assets managed, declining to a low of 0.6% of assets for the highest net worth bracket of actively advised accounts (fee chart is provided at bottom of page). Studies show these advisory fees are approximately 30% lower on average than the overall financial advisory industry and are also in the bottom quartile for fee-based distribution for advisors. In fact, 25% of advisors charge more than 1.75%, while 30% charge more than 1.5% - which is exorbitant.*
It is also important to recognize that industry research has shown that professional advisory services add value to client portfolios. For example, two different studies by both Evestnet & Vanguard found advisors beat market benchmarks by an average of +3% a year, with Evestnet finding tax benefits alone add up to more than +1% annually over the broad market (for 1995-2014 period). Similarly, the Vanguard study found advisors overall added +3% each year with portfolio construction, behavioral coaching (e.g. avoid emotional investment decisions like panic selling) and wealth management. Perhaps this added-value is why client satisfaction with financial advisors is amongst the highest relative to all of the industries monitored by the American Customer Satisfaction Index (ACSI).
Fortunately, traditional investment advisory fees on taxable assets managed generally can also be considered tax deductible under "miscellaneous investment-related itemized deductions." Miscellaneous itemized deductions are generally limited to the amount of expenses over and above 2% of your adjusted gross income (AGI). In other words, there’s a floor below which you lose the ability to deduct. The point being is the real cost of advisory fees are typically further reduced with itemized write-offs (please consult with your tax specialist).
Below, please find the declining fee rate model for the respective asset brackets. The minimum asset value of $250,000 is largely driven by the diversity of asset classes and individual holdings employed for portfolio risk management, along with the respective purchase minimums for select mutual fund investment vehicles (when applicable, as portfolios also include individual stocks, individual bonds and exchange traded funds [ETFs]).
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Actively Advised Assets:
$250,000-$750,000 $750,001-$2,500,000 $2,500,001-4,500,000 $4,500,001-$7,500,000 $7,500,001-$10,000,000 |
Fee as % of Portfolio Size:
1.00% 0.90% 0.80% 0.70% 0.60% |
Family Office Rates: 0.60%-0.45%
Provide third party, neutral advice to ultra-high net worth families on their financial affairs in excess of $10,000,000. We offer families sound, future-oriented financial guidance: Oversight of professional services & asset managers, transfer of wealth & philanthropic goals, real estate, investment guidance & lifestyle management. |
Finally, we offer a separate lower fee schedule for many retirees - there is a reduced fee schedule from what we show online for needs-based retired clients living solely on income-only portfolios where we customize the portfolio to meet their lifestyle expense needs. Simply put, we can't justify normal fee rates for retiree portfolios that do not have growth portfolio components (which helps offset our fees) and in which we determine the income source from the portfolio as primarily needs-based. Please contact our offices to discuss those qualified retiree fee rates.
Another recent 2017 Financial Advisor IQ article has identified Ameriprise, UBS, Morgan Stanley, Wells Fargo and Merrill Lynch as having the highest Advisor fees in the nation. According to the study the range of Advisors are quite high for many of the larger firms, such as Ameriprise 1.75%-3.00%, UBS 2.5%, Morgan Stanley 2.0%-2.5%, Wells Fargo 1.5%-2.0%, etc. In our view, these types of lofty fees cannot be justified.
Another recent 2017 Financial Advisor IQ article has identified Ameriprise, UBS, Morgan Stanley, Wells Fargo and Merrill Lynch as having the highest Advisor fees in the nation. According to the study the range of Advisors are quite high for many of the larger firms, such as Ameriprise 1.75%-3.00%, UBS 2.5%, Morgan Stanley 2.0%-2.5%, Wells Fargo 1.5%-2.0%, etc. In our view, these types of lofty fees cannot be justified.
*PriceMetrix Insights (2011), "Fee & Managed Asset Pricing") examines key metrics and trends in the pricing of fee and fee-based accounts. The analysis is based on the PriceMetrix aggregated North American database representing 15,000 advisor books, 2.3 million investors, 380 million transactions, $1 million fee-based accounts, and over $850 billion in investment assets.
Disclaimer: The website provides general information regarding our business along with access to additional investment related information. Material presented on this website is believed to be from reliable sources and is meant for informational purposes only. The intent is to provide helpful information, which should NOT be construed as investment advice. We do not guarantee its accuracy, nor completeness, and it is not intended to be the primary basis for investment decisions. We do not make personal investment recommendations to people or entities except to those who have engaged us expressly for the purpose of providing professional investment advisory services. Montecito Capital Management Group’s ADV filing is available online at http://www.adviserinfo.sec.gov and current FORM ADV Part 2, which describes the services offered, fees charged and detailed company information, among other things, is available upon request free of charge. To a certain degree we are limited in our fiduciary capacity by the firm's non-discretionary client relationship, whereby the client dictates the investment parameters and contractually agrees to accept sole responsibility for their choices.
Disclaimer: The website provides general information regarding our business along with access to additional investment related information. Material presented on this website is believed to be from reliable sources and is meant for informational purposes only. The intent is to provide helpful information, which should NOT be construed as investment advice. We do not guarantee its accuracy, nor completeness, and it is not intended to be the primary basis for investment decisions. We do not make personal investment recommendations to people or entities except to those who have engaged us expressly for the purpose of providing professional investment advisory services. Montecito Capital Management Group’s ADV filing is available online at http://www.adviserinfo.sec.gov and current FORM ADV Part 2, which describes the services offered, fees charged and detailed company information, among other things, is available upon request free of charge. To a certain degree we are limited in our fiduciary capacity by the firm's non-discretionary client relationship, whereby the client dictates the investment parameters and contractually agrees to accept sole responsibility for their choices.