What does FLAT FEE mean?
Piedmont Wealth Advisory (PWA) utilizes an exceptionally transparent and unique annual “Flat Fee Pricing Model”. This represents a break from the industry-standard "Fee only" or “Percentage of Assets Under Management (AUM)” approach. Our unique pricing approach provides clients with complete pricing clarity and the utmost confidence their financial interests are always being placed first!
The investment industry has a long-held belief that an annual fee of 1% of a client's assets (or a slight variation of this level) is the appropriate pricing platform. Our belief is that this approach is outdated and filled with significant conflicts which adversely impact a client experience. Advisors using a "1% of Assets Under Management" also referred to as a "Fee Only" model continually urge clients to “invest more” as an opportunity to grow the overall advisory fee charged to a client. A question to ask yourself: If your portfolio grows 10%, should the advisor earn 10% more in advisory fees? Clients paying 1% of assets under management (AUM) or "Fee Only" are doing just that. Many advisors are proudly touting a "FEE ONLY" pricing approach currently - FEE ONLY is not FLAT FEE. Fee Only means - the advisors will be charging clients an ongoing percentage of assets under management.
Under a “% of AUM” pricing model, shifting assets from other custodians is continually encouraged by advisors in an effort to add to AUM and ultimately grow revenues paid by the client. Larger portfolio size generates higher fees – simple math. Additionally, mutual funds (when used) have internal fees, which push an overall client expense exposure to 1.5-1.9% annually. PWA offers more efficient and cost-effective approaches without sacrificing personalized service and potential overall portfolio returns. Over a market cycle of 5 + years, internal and external fees will significantly negatively alter the returns for an investor.
We utilize customized portfolios containing a blend of individual holdings, passive and actively-managed investments (closely examining returns, risks and internal fees) results in a very predictable and transparent fee structure for the client. There are no hidden agendas, no internal products and no excessively high “seen and unseen” blended fees to drag down annual portfolio returns.
The annual fee will be discussed in detail with clients and will assuredly be significantly lower than payments to former advisors.