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My current financial advisor is billing monthly; is that common?

My current financial advisor is billing me monthly. It is broken down from 1 percent of my holdings yearly split into 12 months. Is this a normal way to be charged? I send him a check monthly. I want to make sure I am not being taken advantage of.

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April 2018

This is a good question and one I can answer from experience, as my firm bills monthly.

Monthly billing is not as common in the industry, quarterly is the most common.  I chose to bill monthly so clients were not "shocked" with a three month bill all at once.  People are used to paying most of their bills monthly and this smooths things out for them on a cash flow basis as well.  In short, there is nothing worng with being billed monthly.

You should make sure that the bill is being calculated correct, as we provide each client with a monthly invoice that shows them what the bill is and how it was calculated.  Most clients have the fee assessed to the account that is being billed, but you can certainly pay it with outside funds to keep more of your money invested.

Based upon your question, the other piece of information I would be curious to see is how does he account for withdrawals.  So for example, lets say you account is $1MM at the beginning of the year and he is charging 1% or $10K.  How does the fee get impacted if you remove $200k from the account?  Do you get a credit for the removal and is your fee reduced accordingly?

Great question and best of luck!  Paying monthly is not an issue.

April 2018
April 2018
April 2018
April 2018