Advisory Fee or Commission?

We want our clients to fully understand the types of financial services we provide. The bulk of our business is conducted under a fee-based structure, which we prefer. Some types of business are not available in that structure, and earn us commissions.

If you have any question about what type of business we are discussing with you, please ask!

Fee-Based Advisory business

This accounts for most of our business revenue. In this capacity we are supervised by Cambridge RIA and are held to the standard of acting in the clients’ best interests.

  1. Financial Planning – an upfront fee, typically $2500, but can vary based on complexity.
  2. Investment Management – an annual fee (see attached for fee schedule) broken down into components that account for Cambridge’s fee for supervision and service, a portfolio manager fee (as applicable) and our fee.
    1. Advisor-Managed Models
    2. Custom Advisor-Managed Portfolios
    3. Outside Portfolio Managers
      1. Frontier Portfolios – Managed by Frontier Asset Mgmt
      2. Occasionally other managers, including many on the CAAP platform – our fee remains the same, theirs varies

 Commission Business

This is a smaller part of our business revenue – it is a good fit when there is not an appropriate fee-based option. In this capacity we are held to the standard of making suitable recommendations. These products (insurance products and mutual funds) have built-in commissions that are paid to us by the company involved, rather than as a disclosed fee. Some examples of this business are:

  1. Insurance sales – Life, Long-term care, and disability insurance
  2. Some annuities – Fixed and variable annuities that are the best fit for the client but are not available in a fee-based structure.
  3. Brokerage investment accounts – We still have some old accounts that are not fee-based and provide commissions to our business. We rarely open new accounts of this type, unless there is a clear need.

Please see Attachment: Cambridge publication “Understanding the Differences between Commissionable and Advisory Accounts”

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