We are fee-only advisors. We do not earn commissions or receive any compensation from anyone other than our clients.
Avera Wealth Advisors charges a flat fee based on the complexity of your situation, not based solely on the investment assets we manage. We believe this is important, as we are helping you manage your overall wealth. The value we provide to you is in the comprehensive planning, which includes investment planning.
The True Cost of Advice
Outside of advisors who earn a fee solely on commissions, there are two major types of advisors (fee-based and fee-only) within the wealth management industry. Fee-based advisors may collect a fee or commission when they sell you an investment product (i.e., mutual funds, individual bonds, insurance/annuity products, etc.). Fee-only advisors do not accept any commissions; they earn a fee as a percentage of assets under management or as a flat fee (e.g., hourly or a retainer fee). Avera Wealth Advisors charges a flat fee based on total net worth, as we believe it removes some potential conflicts of interest. For example, if you pay an advisor based on the investment assets they manage, paying off debt or purchasing real estate will ultimately lower that advisor’s fee.
We believe most individuals underestimate the true cost of their investments and the total cost of the advice they receive. Trying to calculate the total fees and expenses can be daunting. Below are some of the direct fees and expenses:
Commissions and fees when purchasing an investment product. These fees can be upfront and ongoing, and the amount can vary greatly. Individuals often have a hard time finding these fees, even when they are fully disclosed.
Fees to the advisor. If this fee is based on assets under management, it typically starts around 1% per year. These fees are usually deducted directly from an investment account and can go unnoticed because they are normally buried in the back of an investment statement.
Underlying manager expenses. Outside of individual stocks and bonds, there is generally an annual expense associated with every investment. Individuals typically never see these expenses, as they are deducted from the daily valuation of the investment. Depending on the investments owned, this could be another 1% per year.