Why The Fixed, Fee-Only Model Works For You
The traditional Financial Advisory Fee Model is abysmal. Divergent Path Capital is disrupting this model with a new, fixed, fee-only model. We provide fixed-fee financial planning and investment advice with no commissions, no AUM fees, and no product sales.
Note: Analysis assumes starting wealth of $500,000 earning 6.5%/year in investment returns. The 1% fee model charges a 1% fee of your beginning assets each year. The annual fixed fee model charges $3,250 each year. The Divergent Path Capital Fee charges $3,250 every five years, which is an estimated time between financial updates for long-term planning. This analysis does not guarantee investment returns, and is supposed to be for illustrative purposes only. This also does not guarantee fees charged by Divergent Path Capital. This analysis assumes a 40-year period.
Benefits of a Fee-Only Model
What does fee-only mean and why is it important?
1
Fee-only means the advisor does not earn fees from any other sources, besides the fees that you as a client pay them. This means they don’t earn commissions from selling products and it should mean the firm is not selling any product they earn a fee from (no proprietary product. Divergent Path Capital is a fee-only advisor. We don’t earn commissions and we don’t have proprietary product. We are 100% independent.
Tell me more about the fixed fee…
2
Many advisors charge a fee that is based on a percentage of your wealth. Say you have $500,000 and the advisor charges you a 1% fee. This means you will pay $5,000 (1% * 500,0000) per year. As you wealth grows the advisors fee grows as well. This is true regardless if your investment plan changes. Other advisors charge an annual fixed fee. This prevents the fees from increasing as your wealth grows. While a decent fix, Divergent Path Capital doesn’t think this goes far enough. We charge a fixed fee, but it’s not charged annually. It’s only charged when your financial plan needs updating. Guess what…most financial plans don’t need updating every year, so why pay a fee every year. At Divergent Path Capital we don’t charge a fee every year. Divergent Path Capital is a fixed fee-only advisor. No annual memberships, no annual costs, no commissions and 100% fiduciary standard.
What makes you different?
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As a fee-only advisors that doesn’t charge on an annual basis, we allow our clients to keep more of their money. Yes, that’s why we are disrupting the fee model with this novel idea.