--- title: Why Should I Use Retainer Fee Wealth Management? Here's a Pricing Model Breakdown description: Retainer Fee-Based Wealth Management holds several significant advantages that other fee- and/or commission-based pricing structures do not, including a reduction in potential conflicts of interest and better alignment with clients' financial goals. image: https://www.4tfg.com/hubfs/4Thought-Blog_Why-Should-I-Use-Retainer-Fee-Wealth-Management-Heres-a-Pricing-Model-Breakdown.jpg --- [![4thought_footer-logo.png](https://www.4tfg.com/hs-fs/hubfs/4thought_footer-logo.png?width=335&height=101&name=4thought_footer-logo.png "4thought_footer-logo.png")](https://www.4tfg.com/) - [![4Thought Financial Group](https://www.4tfg.com/hubfs/4thought_footer-logo.png)](https://www.4tfg.com/) [![4Thought Financial Group Compass](https://www.4tfg.com/hubfs/4Though-Compass.png)](https://www.4tfg.com/) - [About 4Thought](https://www.4tfg.com/investment-methodology) - [Our Investment Methodology](https://www.4tfg.com/investment-methodology) - [Management Team](https://www.4tfg.com/management) - [In the Media](https://www.4tfg.com/media) - [Contact](https://www.4tfg.com/contact) - [Services](https://www.4tfg.com/investing) - [Private Individual Investing](https://www.4tfg.com/investing) - [SMAs for RIA /Institutional /Family Office](https://www.4tfg.com/financial-advisors-and-institutions) - [Services for CPAs](https://www.4tfg.com/cpa-investing-services) - [Private Wealth Management](https://www.4tfg.com/wealth-management) - [Retirement Plan Services](https://www.4tfg.com/retirement-plan-services) - [Resources](https://www.4tfg.com/resources) - [Financial News](https://www.4tfg.com/resources) - [Portfolio Review](https://www.4tfg.com/portfolio-review) - [Investment Performance](https://www.4tfg.com/performance-requests) - [CPA Continuing Education](https://www.4tfg.com/cpe-continuing-education) - [FAQs](https://www.4tfg.com/faq) - [FAQs](https://www.4tfg.com/faq) - [Contact](https://www.4tfg.com/contact) - Log In - [Goldman Sachs Accounts](https://www.folioclient.com/servlets/ProcessAction?identifier=loginFormEntry&user.mode=IAC) - [Wealth Management](https://wealth.emaplan.com/ema/SignIn?ema) - [Consolidated Reporting](https://client.myadvisorlink.com/auth/users/webportal/4tfg) - [Retirement Plan Services](https://www.4tfg.com/rps-login) - - Log In - [Goldman Sachs Accounts](https://www.folioclient.com/servlets/ProcessAction?identifier=loginFormEntry&user.mode=IAC) - [Wealth Management](https://wealth.emaplan.com/ema/SignIn?ema) - [Consolidated Reporting](https://client.myadvisorlink.com/auth/users/webportal/4tfg) - [Retirement Plan Services](https://www.4tfg.com/rps-login) ## 4Thought Investing Resources ## 4Thought Investing Resources [Financial News](https://www.4tfg.com/resources/) [Investment Strategy](https://www.4tfg.com/resources/topic/investment-strategy) [Personal Finance](https://www.4tfg.com/resources/topic/personal-investing) [Business Finance](https://www.4tfg.com/resources/topic/business-finance) [For Professionals](https://www.4tfg.com/resources/topic/financial-professionals)[Compass and Crosshairs](https://www.4tfg.com/resources/topic/compass-and-crosshairs) SUBSCRIBE Subscribe for free tips and articles to help you lead a smarter financial life. [Financial News](https://www.4tfg.com/resources) ,[Financial Advisor](https://www.4tfg.com/resources/topic/financial-advisor) ,[Wealth Management](https://www.4tfg.com/resources/topic/wealth-management) ,[Financial News](https://www.4tfg.com/resources/topic/financial-news) # Why Should I Use Retainer Fee Wealth Management? Here's a Pricing Model Breakdown Retainer Fee-Based Wealth Management holds several significant advantages that other fee- and/or commission-based pricing structures do not, including a reduction in potential conflicts of interest and better alignment with clients' financial goals. \[fa icon="calendar"\] Aug 15, 2018 10:29:49 AM by [Michael Duvally](https://www.4tfg.com/resources/author/michael-duvally) ![Why Should I Use Retainer Fee Wealth Management? Here's a Pricing Model Breakdown](https://www.4tfg.com/hubfs/4Thought-Blog_Why-Should-I-Use-Retainer-Fee-Wealth-Management-Heres-a-Pricing-Model-Breakdown.jpg) You wouldn’t ask an electrician to look at your leaky faucet, so why would you ask an investment manager what kind of trust to use to ease the burden of probate on an estate, or how to structure the buy/sell agreement for a business? These topics are not necessarily in their skill set *or* job description. While investment management is a crucial part of [wealth management](https://www.4tfg.com/wealth-management), the two are not synonyms. Additionally, there are multiple ways to pay for these services:   ### **Transaction/Product-Based Commissions** A broker or salesperson provides commission-based product solutions to clients, and gets paid based on the number and/or amount of transactions made for the client. This type of compensation is most appropriate for one-off situations, such as a stand-alone life insurance purchase or speculative individual stock trade, but if a client requires ongoing unbiased advice and more comprehensive services, this is usually not the best solution, as it is laden with conflicts of interest. ### **Assets Under Management (AUM) Fee** An investment manager/advisor provides [fiduciary services](https://www.4tfg.com/resources/different-types-of-financial-planning-services) in exchange for a fee based on a fixed annual percentage of the investment portfolio being managed for the client. This fee structure aligns the incentives of the advisor well with the goals of the investor when it comes to pure investment management and growing the portfolio, but when applied to broader wealth management, it provides no compensation or incentive for the advisor to work on estate planning, employer/employee benefits, or business-related planning (even if they say they are going to do this for you). ### **One-Time Fee** A fiduciary financial planner or wealth manager constructs a financial plan for a singular payment (typically paid half up front and half on delivery of a plan). While this goes a long way toward ensuring the advisor will look at multiple planning aspects and maintain an unbiased perspective, it provides no incentive for ongoing advice and updating the planning after the initial plan is delivered. ### **Retainer Fee** A [fiduciary financial planner](https://www.4tfg.com/resources/finding-your-financial-advisor) or wealth manager constructs a [financial plan](https://www.4tfg.com/resources/how-to-determine-your-financial-planning-goals) and updates it with ongoing advice perpetually for a monthly or quarterly fixed dollar amount fee. This provides the benefit of having the advisor look at all planning aspects from an unbiased perspective (not just investment management), and provides an incentive for him/her to continuously update the planning and provide advice for as long as the client continues to pay the fee. Often an initial living expense and budgeting analysis alone can improve cash flow enough to more than offset the cost of the monthly fee. ### **Combinations of All the Above** Some advisors/firms may use more than one of the above methods to provide the best arrangement to service the client’s particular scenario. [![Coordinated-Wealth-Management](https://www.4tfg.com/hs-fs/hubfs/Coordinated-Wealth-Management.png?width=300&name=Coordinated-Wealth-Management.png)](https://www.4tfg.com/wealth-management)One way to explain the difference between wealth management and [investment management](https://www.4tfg.com/investing) is to point out [the four quadrants of wealth management](https://www.4tfg.com/wealth-management). Investment management is one of these four quadrants, but is not the *only* part of the program. Other areas include estate planning, business succession, and fringe benefits planning. Each is an integral part of the wealth management process, and paying an advisor a retainer fee for these purposes allows him/her to ensure all four are in sync and the client will avoid any future headaches. It is common for advisors to verbally claim to offer investment management and wealth management under a singular fee plan based off assets under management (although very few of them will put this in writing). This is often not as advantageous or productive as it could be for the client (or advisor), because the advisor is not motivated to go and do what’s necessary to optimize a client’s financial life beyond the investment management aspect in this arrangement. (They are not being paid directly for anything other than managing your portfolio—they’re just doing the other three aspects as a value-added “bonus” with their investment management services.) However, using a [retainer fee arrangement](https://www.4tfg.com/resources/retainer-fee-based-financial-planning-wealth-management) for comprehensive wealth management purposes offers the advisor the motivation to fully commit to all four aspects of the broader plan and give the client an unbiased opinion that is not clouded by the need to sell unnecessary products, or the incentive misalignment of being compensated only for portfolio management. The continuous involvement of an advisor in a client’s fiscal life under a retainer fee arrangement provides a greater likelihood that any advice rendered is also properly implemented over time. A financial plan done with a one-time fee is very susceptible to being framed out and given to the client, but because no one is compensated to follow up and get it done, the plan falls to the wayside and is never implemented correctly. *But* an advisor on retainer can continuously make improvements and modifications to the plan as the client’s situation and needs evolve, and can follow up to ensure things actually get done, as planned. If at any point the client thinks the retainer fee advisor is no longer doing enough work to justify their fee, they can simply stop paying it. [Retainer fee wealth management](https://www.4tfg.com/resources/why-cpas-should-partner-with-a-retainer-fee-based-financial-planning-wealth-management-firm-now) is applicable to families, privately held business owners and corporate professionals, and can be tailored to fit any situation. An advisor’s continuous involvement, as pointed out above, is likely to cause an improvement in one’s financial life based on the heightened level of coordination, knowledge, and organization that they will bring to the table. The initial living expense and budgeting analysis alone can show the client’s pain points, and often monetarily justifies the need for an advisor on retainer. --- ### **4Thought Financial Group** 4Thought Financial Group is a Syosset, NY-based wealth management firm specializing in helping clients achieve their financial goals through a data-driven [Multi-Method Investment](https://www.4tfg.com/investment-methodology) strategy. It is a proponent of retainer fee-based fiduciary advice, and a Registered Investment Adviser (RIA) that always has clients’ best interests in mind. As opposed to wealth management services demanding a high, one-time fee, 4Thought Financial Group advocates for those with a low, ongoing retainer fee, with *No Contractual Term Commitment.* These prove the advisor’s commitment to sustained guidance toward meeting client objectives.  **[Contact 4Thought Financial Group, Today](https://www.4tfg.com/contact).** ### Author: Michael Duvally ![](https://www.4tfg.com/hubfs/Michael_Duvally.jpg) [mailto:michael.duvally@4tfg.com](mailto:michael.duvally@4tfg.com) Michael Duvally is an Operations Associate and Investment Adviser Representative at 4Thought Financial Group, an SEC-Registered Investment Adviser (RIA). He holds a bachelor’s degree in finance from Philadelphia University. 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The GIPS firm definition excludes any third party asset management programs over which 4Thought maintains oversight advisory agreements on behalf of its clients, any arrangements under which 4Thought provides recommendations for client self-implementation, and any assets under advisory but not under direct management (in which 4Thought provides allocation changes or trading signals to third party firms but does not take discretion over the trading of client accounts). GIPS-compliant performance information for 4Thought's strategies may be obtained by email at [info@4tfg.com](mailto:info@4tfg.com); on the 4Thought website at [www.4tfg.com/performance-requests](https://www.4tfg.com/performance-requests); or by phone at (516) 300-1617. Disclaimer [Form CRS, Firm Brochure (ADV Part2), Privacy Policy Notice, and Wrap Fee Program Brochure](https://www.4tfg.com/hubfs/Firm_Brochure_ADV_Pt2-Privacy_Policy-Wrap_Fee_Program_Brochure.pdf) [Disclosure](https://www.4tfg.com/disclosure) [BrokerCheck](http://brokercheck.finra.org/) Investment Advisory Services are offered through 4Thought Financial Group Inc., an SEC Registered Investment Adviser. Registration does not imply a certain level of skill or training. The content presented here is for informational purposes only and does not constitute a complete description of our investment advisory services or performance. This website is in no way a solicitation or offer to sell securities or investment advisory services except, where applicable, in states where we are registered (or notice filed) or where an exemption or exclusion from such registration exists. Information throughout this site, including, but not limited to, stock quotes, charts, articles or any other statement or statements regarding market or other financial information, is obtained from sources which we, and our suppliers believe reliable, but we do not warrant or guarantee the timeliness or accuracy of this information. Nothing on this website should be interpreted to state or imply that past results are an indication of future performance. Neither we nor our information providers shall be liable for any errors or inaccuracies, regardless of cause, or the lack of timeliness of, or for any delay or interruption in the transmission thereof to the user. THERE ARE NO WARRANTIES, EXPRESSED OR IMPLIED, AS TO ACCURACY, COMPLETENESS, OR RESULTS OBTAINED FROM ANY INFORMATION POSTED ON THIS OR ANY LINKED WEBSITE. Any opinions presented here are subject to change at any time without notice. Any comments or postings are provided for informational purposes only and do not constitute an offer or a recommendation to buy or sell securities or other financial instruments. Readers should conduct their own review and exercise judgment prior to investing. Investments are not guaranteed, involve risk and may result in a loss of principal. Past performance does not guarantee future results. Investments are not suitable for all types of investors. \*4Thought Financial Group claims compliance with the Global Investment Performance Standards (GIPS®). GIPS® is a registered trademark of CFA Institute. CFA Institute does not endorse or promote this organization, nor does it warrant the accuracy or quality of the content contained herein. The GIPS firm definition excludes any third party asset management programs over which 4Thought maintains oversight advisory agreements on behalf of its clients, any arrangements under which 4Thought provides recommendations for client self-implementation, and any assets under advisory but not under direct management (in which 4Thought provides allocation changes or trading signals to third party firms but does not take discretion over the trading of client accounts). GIPS-compliant performance information for 4Thought's strategies may be obtained by email at [info@4tfg.com](mailto:info@4tfg.com); on the 4Thought website at [https://www.4tfg.com/performance-requests](https://www.4tfg.com/performance-requests); or by phone at (516) 300-1617. ```json { "@context" : "http://schema.org", "@type" : "Organization", "address" : { "@type" : "PostalAddress", "addressCountry" : "", "addressLocality" : "Syosset", "addressRegion" : "New York", "postalCode" : "11791", "streetAddress" : "6851 Jericho Turnpike Suite 120" }, "alternateName" : "4 Thought Financial Group", "areaServed" : { "@type" : "GeoCircle", "geoMidpoint" : { "latitude" : "+40.8100713", "longitude" : "-73.5172286" }, "geoRadius" : "150 km" }, "description" : "Retainer Fee-Based Wealth Management holds several significant advantages that other fee- and/or commission-based pricing structures do not, including a reduction in potential conflicts of interest and better alignment with clients' financial goals.", "email" : "[GDelorenzo@ClearHorizonGroup.Com, info@4tfg.com, no-reply@4tfg.com]", "image" : "https://www.4tfg.com/hubfs/4Thought-Financial-Group-OG.jpg", "logo" : "http://cdn2.hubspot.net/hubfs/2201374/4thought_header-logo.png", "naics" : "523920", "name" : "4Thought Financial Group", "sameAs" : [ "https://www.facebook.com/4ThoughtFinancialGroup", "https://www.linkedin.com/company/3043702", "https://www.youtube.com/channel/UCEHRK-25mAwfTlNzdvFSN3g", "http://investment-advisors.credio.com/l/39493/4thought-Financial-Group-Inc" ], "telephone" : "516-300-1617", "url" : "http://www.4tfg.com" } ``` ```json { "@context" : "http://schema.org", "@type" : "BlogPosting", "author" : { "@type" : "Organization", "name" : "Michael Duvally" }, "dateModified" : "August 16, 2018, 2:41:14 PM", "datePublished" : "2018-08-15 14:29:49", "description" : "Retainer Fee-Based Wealth Management holds several significant advantages that other fee- and/or commission-based pricing structures do not, including a reduction in potential conflicts of interest and better alignment with clients' financial goals.", "headline" : "Why Should I Use Retainer Fee Wealth Management? 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