composed financial: a better fee-only advisor
TRANSCRIPT
Client Experience DemoClient Introduction
The Fee-Only Advisor
Advantages:
1) Tailored, personal service
2) Credentials
3) Less conflicts of interest
4) No pushy sales tactics
Disadvantages:
1) Higher fees
2) Restrictions – high investment minimums
3) Discretionary only – must move money to preferred custodian
The Composed Financial DifferenceComposed Financial Other Fee-Only Advisors
Personalization
Credentials Less Conflicts of
Interest
Not Sales Driven
High Fees Investment Minimums
Requirement to move money
Competitive Fee Structure
Our all-in fee is less than HALF of the industry
average.
Assets Under Composed IndustryManagement Avg Fee1 Avg Fee2
<$0.10M 1.5% 1.7%$0.10M - $0.25M 0.9% 1.6%$0.25M - $0.50M 0.7% 1.5%$0.50M - $1.00M 0.5% 1.3%$1.00M - $2.00M N/A 1.2%$2.00M - $3.00M N/A 1.1%$3.00M - $4.00M 0.3% 1.0%$4.00M - $5.00M N/A 0.9%
> $5.00M N/A 0.6%Weighted Avg 0.5% 1.3%
Competitive Fee Structure
1 - Calculated as of December 2014 to include fixed, discretionary, and non-discretionary fees.
2 - From 2011 PriceMetrix report titled 'Fee and Managed Asset Pricing’ (www.pricemetrix.com)
Clear Fee Structure
• Fee-only, not fee-based• No 3rd party rebate agreements, commissions, or hidden fees• Successful plan highly influenced by ability to control fees• Focus on the two things guaranteed to hit your portfolio: fees and taxes
Financial Planning – Annual Fee of $500
Monies ManagedAssets Under Management
Percent of Assets Under Management
Discretionary Any amount 1.0%Non-discretionary $0.0M - $1.0M 0.8%Non-discretionary $1.0M - $2.0M 0.6%Non-discretionary > $2.0M 0.4%
Blueleaf simplifies tracking all your savings and long-term financial goals while making everything you own transparent, understandable, and controllable.
• Account aggregation
• Weekly email summary
• Client portal
• Integrated with inStream
Simple, Personal Financial Tracking
= Real time monitoring of your plans
= We organize your financials for you
= A simple update to start your week
= See all your accounts in one place
Account Aggregation
Weekly Email
Domestic stock fund HighForeign stock fund LowInvestment grade bond fund HighHigh yield bond fund High
Jane's 401kDomestic stock fund LowForeign stock fund HighInvestment grade bond fund HighHigh yield bond fund High
John's 401k
Multiple options LowJane's IRA
The Power of Aggregation
401ks are inherently limited in their investments. It pays to look at all the accounts available for retirement in aggregate.
Domestic stock fund LowForeign stock fund HighInvestment grade bond fund HighHigh yield bond fund High
John's 401kDomestic stock fund HighForeign stock fund LowInvestment grade bond fund HighHigh yield bond fund High
Jane's 401k
Investment grade bond ETF LowHigh yield bond ETF Low
Jane's IRA
The Power of Aggregation
By looking at all your accounts together, we can choose the best and lowest cost investments from each account.
Domestic stock fund LowForeign stock fund LowInvestment grade bond ETF LowHigh yield bond ETF Low
Combined 401ks, IRA
The result is an overall portfolio with all lower cost options. Actively managed funds have been proven to underperform versus their
respective benchmarks, so it pays to choose the lowest cost options that closely follow the benchmarks. Each of our clients has
experienced a decrease in their overall portfolio expense ratio after implementing our recommendations.
The Power of Aggregation
Hidden Fee Issue – Mutual Funds
Composed CompetitorStated fee 0.60% 0.00% Actual invoiceExpense ratio 0.40% 1.50% Less obviousTotal fees 1.00% 1.50%
Composed CompetitorPre-expense return 7.40% 7.40%Expense ratio -0.40% -1.50% Less obviousPost-expense return 7.00% 5.90%Stated fee -0.60% 0.00% Actual invoicePost-fee return 6.40% 5.90%
Impact of High Fees
If you had invested $20k invested in the S&P 500 each year for the past 25 years,
Total Invested Total Costs Ending Balance1.0% Costs $500,000 $108,303 $1,137,5581.5% Costs $500,000 $154,579 $1,050,281
Difference -$46,276 $87,277less in fees more in earnings
an extra 0.5% in fees would have erased $87,277 in earnings
Client Portal / Document Management
Integrated With
Financial plans updated with new account balances from Blueleaf
Real time tracking
Anytime your plans falls outside of a 70-90% likelihood, an
automatic review is triggered
Financial Plan Example
Quarterly Performance Tracking
We will not only track versus industry benchmarks, but ALSO VERSUS YOUR PRIOR INVESTMENTS.
Other Assistance
Your go-to for any financial matters:
• Life insurance planning and cost analysis
• Gap and cost analysis of other insurance
• Education planning / 529 accounts / custodial accounts
• Wills, living wills, power of attorney for finances
• Estate planning
• Real estate advice