RIS is a fee-based advisor. Investment advisory clients pay a quarterly fee based upon assets under management. When you are an advisory client, we charge for assets under management as described below. However, we do not charge for your questions and discussions about estate planning, the need for more or less life insurance, the need for long-term care insurance, retirement decision-making and implementation, stock option decisions, better ways to fund college expenses, quarterbacking the family’s affairs in case of an untimely death, etc. This other advice is part of being an investment advisory client. Some clients have said, "At last, a place to ask my ‘dumb’ questions on estate planning, gifting ideas, taxes and retirement contributions without an hourly meter ticking."
Of course, there are times when we don’t have the answers or it requires a complicated answer. In these situations, we will refer you to an estate planning attorney or CPA if you do not already have one. In addition, we do not get involved in drafting or interpreting trust or other estate planning documents and don’t prepare tax returns. We do, however, help assemble tax information on your accounts for your tax preparer.
In many cases, we have the ability to deduct our investment advisory fees directly from your IRAs or University TIAA-CREF and Fidelity accounts. Fortunately, the University of Michigan and Eastern Michigan University both allow for such deductions. The benefit to you is the ability to pay our fees with pre-tax dollars. Our fee schedule is different depending on where your assets are located.
The costs of the plans are far below what we could charge on an hourly rate. Plans may have 15 to 30 man-hours involved analyzing, preparing and explaining the plan. Plans with the estate planning section would normally cost $3,000 to $5,000 or above. Our retirement plan is an effective way for the two parties to get acquainted. It enables prospective clients and us to determine whether we would like to work together in the years following.
Having a plan prepared for you does not obligate you in any way to have an on-going advisory relationship. In spite of that lack of obligation, probably more than 90% of the clients for whom we prepare plans become on-going advisory clients. This is a service business, and trust is an important ingredient. The plan helps prospective clients determine whether they can trust us and can rely upon us for knowledgeable advice.
Clients tend to prefer our fee-only services because it means our advisory fees go up when the client’s assets go up. And, our fees go down when the client’s assets go down. So, we, the advisor, prosper when you prosper. And, we suffer when you suffer. Our interests are in line with yours. This is not true with a commission-based broker or planner.
A fee-only relationship is important for many people looking for somebody that they can trust to manage their financial affairs. When people are looking for an advisor to help them create financial independence in their lifetime and multi-generational wealth for their heirs, they do not want our compensation divorced from their results or based on our needs rather than theirs. A fee-only relationship is fair and appropriate for both sides.
Please refer to our form ADV for additional information relating to services and costs.
Retirement Income Solutions, Inc. is an independent Registered Investment Advisor.
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