Fees for Services
Retirement Income Solutions is a fee-only advisor, which means we derive no compensation from selling investment products for a commission or fee. Our compensation comes only from our advisory services. This compensation structure encourages our advisory team to work on the client's behalf only, rather than offer products that may not be in the client's best interest.
Fee-only services versus commission-based services
We don’t receive any commissions that might influence our thinking. Our fees are based only on a percentage of the value of your assets; therefore, our management fees increase only when the value of your assets goes up, and our fees go down whenever the value of your assets decreases.
A fee-only relationship is important for clients who want a professional 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 separated from their results or based on our needs rather than theirs. A fee-only relationship is fair and appropriate for us and the clients we serve.
Investment advisory clients pay a quarterly fee based on assets under management. There are no additional charges for your questions and discussions about numerous financial matters. Receiving advice on these matters is part of being one of our investment advisory clients.
Of course, there are times when we don’t have the answer or the question requires the advice of another professional. 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 draft or interpret trust or other estate planning documents, and we don’t prepare tax returns. We do, however, help assemble tax information on your accounts for your tax preparer.
Investment advisory fees
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 fee for assets managed by RIS and held by our independent custodian, Pershing, LLC, whether they are personal, joint, trust or IRA accounts, is 1% per annum up to $1,000,000, 0.8% for the next $1,000,000, and 0.6% above $2,000,000.
For those assets managed by SEI, an asset management platform, the fees are 1% per annum up to $500,000 and 0.6% thereafter.
For 401k plans as well as University TIAA-CREF and Fidelity retirement plan accounts, the fees are 0.65% per annum up to $1,000,000, 0.4% for the next $1,000,000, and 0.25% above $2,000,000. Besides the fee deduction ability, we have a firm-to-firm relationship with TIAA-CREF and Fidelity that allows us to make investment changes on behalf of our University clients.
Each retirement plan is customized for each client. Depending on the complexity of the family’s financial situation and the scenarios to be evaluated, the fee for a plan varies from $300 to $1,000.
The cost of a retirement plan is far below what we could charge on an hourly rate. Plan preparation may require five to 20 hours of analysis, preparation, and explanation. Plans with heavy estate-planning emphasis would normally cost $3,000 to $5,000.
Having a plan prepared for you does not obligate you in any way to enter an on-going advisory relationship. However, even with no obligation, more than 90% of the clients for whom we have prepared plans have become on-going advisory clients.