We are primarily compensated by a percentage of assets under our management, hourly fees, fixed fees and third party referral fees. Our fees vary depending on the services you receive. Portfolio management fees are based upon a percentage of your assets under our management, and are payable each month in arrears. The more assets there are in your advisory account, the more you will pay in fees. Therefore, we have an incentive to encourage you to increase the assets in your account. When we refer you to a third party investment adviser, we receive a portion of the third party investment adviser’s fee as compensation. We provide financial planning services for an hourly or fixed fee. Our pension consulting fees are based on hourly, fixed or a percentage of assets under advisement fees depending upon the arrangement. Our fees are negotiable depending upon the complexity and scope of the service, your financial situation, and your objectives.
For additional information regarding our fees, please see Item 5 of our Form ADV Part 2A at the following link: https://adviserinfo.sec.gov/firm/brochure/174590.
Description of Other Fees and Costs: The fees that you pay to our firm for investment advisory services are separate and distinct from the fees and expenses charged by investment companies (e.g., mutual funds, exchange traded funds, unit investment trusts and variable annuities). These fees are described in each fund’s prospectus. These fees will generally include a management fee and other fund expenses. You will also incur transaction charges and/or brokerage fees when purchasing or selling securities. These charges and fees are typically imposed by the broker-dealer or custodian that executes the trade. The broker-dealer or custodian may also charge your account for custodial fees, retirement account fees, trust fees, exchange fees, redemption fees that may be assessed on investment company shares, transfer fees, account termination fees or other special service fees and charges. We do not share in any portion of these fees imposed by the broker-dealer or custodian. To fully understand the total cost you will incur, you should review all the fees charged by investment companies, broker-dealers, our firm, and others.
You will pay fees and costs whether you make or lose money on your investments. Fees and costs will reduce any amount of money you make on your investments over time. Please make sure you understand what fees and costs you are paying.
For additional information about fees charged by third parties, please refer to Item 5 of Form ADV Part 2A at the following link: https://adviserinfo.sec.gov/firm/brochure/174590.
Conversation Starter. Ask your financial professional—
- Help me understand how these fees and costs might affect my investments. If I give you $10,000 to invest, how much will go to fees and costs, and how much will be invested for me?
What are your legal obligations to me when acting as my investment adviser? How else does your firm make money and what conflicts of interest do you have?
When we act as your investment adviser, we have to act in your best interest and not put our interest ahead of yours. At the same time, the way we make money creates some conflicts with your interests. You should understand and ask us about these conflicts because they can affect the investment advice we provide you. Here are some examples to help you understand what this means:
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All investment advisers face conflicts of interest which are inherent in the business. Our primary source of compensation is through asset based fees. Therefore, we are incentivized to acquire new clients and to increase assets under management. Other conflicts of interest result from other business activities we engage in and relationships we have with business partners and third parties, or affiliations we have established with other financial institutions.
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We may recommend that you use a third party advisor (TPA) and we will share in the compensation received by the TPA for managing your account. The compensation arrangement presents a conflict of interest due to a financial incentive to recommend the services of the third party advisor. You are not required to use the services of any TPA we recommend.
Conversation Starter. Ask your financial professional—
- How might your conflicts of interest affect me, and how will you address them?
Please refer to our Form ADV Part 2A for further information on our conflicts of interest and how we address them at the following link: https://adviserinfo.sec.gov/firm/brochure/174590.
How do your financial professionals make money?
Our financial professionals receive salary based compensation, a percentage of advisory billings and/or bonuses based on the amount of client assets they bring to our firm. Additionally, financial professionals who are part owners of our firm share in the profits generated by our firm. Therefore, our financial professionals have an incentive to encourage you to increase the assets in your account, and to increase our firm’s profitability. Our financial professionals are insurance agents and registered representatives with Royal Alliance Associates, Inc. a securities broker-dealer. This creates a conflict of interest because these persons will receive additional commission-based compensation in connection with the purchase and sale of insurance and securities, including 12b-1 fees for the sale of certain investment company products. You are not required to purchase insurance or securities from our financial professionals.
