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Financial Planning Idea for the Day: The Advantages of Retainer Fee Financial Planning

Welcome to the 4Thought Financial Group ‘Financial Planning Idea for the Day’ video series, with our CFO and host, Martin Levine. This week, Levine explains the advantages of retainer fee financial planning. 

Retainer fee-based financial planning has been gaining steam in recent years over more traditional, commission-based and assets-under-management models, and may hold quite a few significant benefits, as Levine explains. 

RetainerFee

“We call it retainer fee financial planning. Others call it comprehensive wealth management. Either way, it’s a fixed dollar amount as an advisory fee, that you pay the advisor, like us, an independent firm that will give objective advice,” he says. “So, that’s different than a percentage, a percentage [of assets] under management.”

Because commission-based advisors earn more with each financial product they sell to their clients, they can sometimes be guilty of advising based more on their own best interests, rather than the clients'. Levine explains that with the more straightforward approach of retainer fee financial planning, comprehensive advice is the sole focus.

“So that’s the Idea for the Day, is to get this comprehensive wealth management done, with paying a monthly retainer, a fixed amount versus a percentage, and to make sure you’re on track to achieving your goals and objectives.”

“So, this way, the client wants strictly advice, that’s how you get it, you pay for it like you pay your accountant or your attorney. And it’s objective advice, it’s comprehensive advice, it includes business succession, estate planning, investment planning and fringe benefit planning,” he says. “Everything intertwined into one. A deep dive on expenses, review bank statements, review of credit card statements, and then budgeting can be done, as well as future cash flow projections.”

Perhaps the key word in all of the above is ‘objectivity,’ as it stresses this point of an untainted relationship, less constrained by the incentivized salesmanship of the commission-based model. 

“So that’s the Idea for the Day, is to get this comprehensive wealth management done, with paying a monthly retainer, a fixed amount versus a percentage, and to make sure you’re on track to achieving your goals and objectives,” Levine concludes. 

Check back for the 4Thought Financial Group ‘Financial Planning Idea for the Day’ every week, as Martin Levine tackles frequently asked questions from clients spanning a wide range of topics, such as micro versus macro investment options, annuity for income, and avoiding high investment fees, among many others.

4Thought Financial Group is a Syosset, New York-based provider of Retainer Fee-Based Wealth Management services specializing in delivering effective financial planning solutions aligned with clients' lifelong goals.

Contact 4Thought Financial Group today, and let’s build wealth, together.

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