What Is Fee-Only Financial Planning?

The world of financial advice is divided into 3 main categories. The traditional financial advisor is what most people are familiar with. This is the most common arrangement where a financial advisor works for an institution and sells product. The financial advice is given “free” and is part of the process of selling these products. The second category of advisor is called a fee-based financial advisor. This type of advisor does the same thing as the traditional advisor, but charges a flat percentage fee based on the assets managed rather than by product. The cost can be less but still can add up over time because the fees are based on a percentage of the assets you have. The advice is still part of the service and is “free”. The last option is a fee-only or fee for service financial planner. This type of planner only gives advice and does not sell product. The charge for the advice is a flat dollar amount based on how much time is spent or how complicated the project is.

What Are the Advantages and Disadvantages of Each Type?

Cost

The traditional advisor tends to be the most expensive. The fees are based on the dollar amount of products you buy. As an example, if you invest $100,000 worth of mutual funds and are paying 2% fees, you are paying $2000 per year as long as you own these funds. The 2% figure is an average MER (Management Expense Ratio) based on a mixture of equities and fixed income (stocks and bonds). There may be other fees like sales loads, account fees, trading fees, trailer or referral fees, administrative fees or penalties for switching or redeeming early. To know the real cost, you would have to add up the costs for your situation.

The fee-based financial advisor may have reduced fees since they are charging a flat percentage instead of an MER plus other costs. Reduced fees are somewhere in the range of 1% to 1.5% for an entire account. The catch is that this option is available to people with larger amounts of assets since the fees charged have to be substantial enough to make it profitable. The minimum asset threshold usually starts at $500,000 in investible assets (assets in a trading account). If you have $1 million invested, this fee can be as high as $10,000 to $15,000 per year.

The fee-only financial planner charges for a plan or project using a flat dollar fee. This means that you would have a plan done once or periodically every 3 or 5 years, and you would pay somewhere between $1,000 and $5,000 per plan.

Note: don’t fixate too much on the names or titles of the person you are dealing with – i.e. financial planner versus financial advisor. These names or titles are used interchangeably in Canada and do not specify a given service or accreditation. There are also additional names like financial consultant, investment advisor, portfolio manager and so on. The key to know what you are dealing with is to ask “what are the fees in dollars?” and have this explained to you. Judging from what you hear, you will know what type of fee structure that is being presented.

Conflict of Interest

The traditional advisor has to serve many masters. There is the client who is paying the bills and must be taken care of. There is the institution and the boss who wants to make the most money possible from client fees. Lastly, there is the regulator / compliance team who ensures that you the advisor is serving the client and not breaking any company, industry or criminal laws. If your company has products that are sub-par, you the advisor are now conflicted. You can sell the client a mediocre product and make your boss happy, or tell the client to go to a competitor and get a better deal which will make the customer happy. Unless you are a very experienced advisor with a substantial book of business or you don’t need the job, it is very difficult to make everyone happy.

The fee-based financial advisor has a similar dilemma if serving the client means that assets should be taken elsewhere. There is also the advice of paying down debt, purchasing real estate, using money to buy a business, starting an art collection, taking money overseas, buying physical metals and so on which are not products sold by the institution and therefore would not generate any fees.

The fee-only planner does not have these conflicts because there is only one master – the client. There are no products and no assets – only the legal system and the ethics body of the association that the advisor belongs to.

Array of Services

In this area, the traditional advisor has the advantage. If you are in a situation that requires a will, an accountant, an estate trustee, a mortgage broker, or insurance products, the traditional financial advisor works for an institution that can provide these services. The administrative aspect of this is also handled for you: Opening accounts, trading, rebalancing the portfolio, automated deposits and withdrawals or filling out forms.

A fee-based financial planner may be able to provide these extra services, but it will depend on the size of the firm. The smaller “boutique” firms may specialize in portfolio management or investments and you may still have to recruit a network of professionals if you have a more complex situation.

The same situation applies for a fee-only or fee for service financial planner. People who do fee-for-service planning tend to be individuals or small companies without the resources to provide a network of professionals.

Minimum Asset Level

If you are selling products or managing assets, the fees that pay for the whole process including the financial planning are a percentage of the amount of money being used to purchase products or assets. If the amount of money being invested is $100,000 at 2% fees, you would be paying $2000 per year. The products would likely come from a preset list. A “know your client” (KYC) survey would be filled out and products are selected rather than having a comprehensive plan done. Asset minimums for a financial plan typically start at $500,000 in product purchases or assets, but some firms may provide a plan with a smaller asset amount. In the age of robo-planning, a plan can be created using software for under $1,000, but it may not cover all of the scenarios since software is not complete versus talking to a human being.

In the fee-only financial planner case, there is no need for asset minimums because the revenue is not tied to product sales. The revenue generated is tied to time spent and work performed, and whether there is a $1000 trade or a $100 million trade in buying a product, the amount of work in creating a plan and allocating the assets will be the same.

Which type of advisor is right for you? It will depend on what you have, what you need, how much of the work you are doing yourself, and how much knowledge and comfort you have about finances.

Calling All Millennial Women: Your Finances Need You

In our last blog we discussed the results from the USB survey indicating the deferral of financial planning by women to their partners. If you recall, the highest demographic for this was millennial women. Millennials are famous for being an easy target for mockery but perhaps it’s time for the prior generations to help them pull up their bootstraps when it comes to financial planning.

Millennials are the fastest growing group in the workforce and are dealing with the challenges of graduating during a recession and the continued wage gap. Combine these factors with the likelihood of taking time away to have children and a longer lifespan, it’s more important than ever to master finances and long-term planning.

Another layer of complexity is that most millennials are raised by parents who live with high debt-ratios. Baby-boomers were raised with a fear of owing money and made a concentrated effort to avoid it and to pay it back as quickly as possible. The next generations were handed credit like candy and indulged. Learning by example may not be the best course of action, so we’ve compiled some advice for the up-and-coming.

Spend Carefully. Along the same lines as “think before you speak”, think before you buy. Evaluate what long-term benefit that item is going to bring to you. When it comes to the nickel and dime type expenses such as your daily dose of fancy coffee, invest in a fancy espresso machine at home.
Build an Escape Plan. Life often throws challenges our way and true power comes from being able to choose your own path. Having some cash squirrelled away allows you to make the choices which are right for you and prevent you from returning back to what was keeping you in debt.
Set up an automatic deposit from your paycheck to an account which you are not able to easily access. That way you never had the money, so you can’t miss it.
Funnel your wins. Instead of “treating” yourself with your birthday gifts, tax return or bonus, treat your future self by putting it into your savings account.

Manage Your Debt. You’ve grown up in an era of credit and debts from student loans to car loans to credit cards. Make a list of all you owe and the corresponding interest rates. This will enable you to prioritize which debts you want to pay off the quickest. High-interest debts should be the first target to stop the cycle of handing your money to an institution.

Save for Your Future. It’s hard to look that far forward when you’re in your 20′s, but imagine the freedom of being able to live your life your way when you’re older. With a few sacrifices, you can save now and play later.

Casino Games – A Review of Villento Casino

Many professional gamblers tend to stick to the most well-known online casinos with a good reputation. In fact, this is a very conscious and sound strategy for high rollers as they will only trust their money with the top online casino sites. However, this behaviour may also lead to the paradox of missing out on the biggest new casino bonuses. As a matter of fact, there are plenty of less known casinos out there who actually belong to the same casino network as the more popular ones – while offering better bonuses at the same time!

Villento Casino is a good example of this. This casino has yet to make some noise in the casino gaming industry, but it is in fact part of the Casino Rewards Group, a very trusted and reputable online casino network. This network is responsible for top-notch casinos like Golden Tiger Casino and Blackjack Ballroom to mention a few. So when you sign up at Villento Casino you know that you will get a bang for your buck with great gameplay, superb graphics and smart player options.

Now, like we said before, Villento Casino is a good example of one of the lesser known casinos, but in this case it can be as trusted as any other casino that is a part of Casino Rewards Group. But where Villento Casino may lack in fame – certainly this casino compensates this through their extensive bonuses.

Upon joining, Villento Casino offers over $1,000 USD worth of free bonuses. On your first deposit, your bankroll is doubled by a 100% match bonus of up to $150 USD free. Not bad! Deposit again and you’re rewarded with a 50% match bonus of up to $250 USD free. Getting even better! On your third and fourth deposits the casino will give you a 30% and 20% match bonus respectively, both with a total value of up to $200 USD free. And finally, (getting even better still), your fifth deposit will see you walk away with a 10% match bonus of up to $200 USD free. That’s a grand total of $1,000 USD in bonuses to start playing at Villento Casino – not many casinos will match that.

When considering to opt in for a new bonus offer, one should always evaluate the overall value of playing at the casino in question. The deposit bonuses may be great, but if the number of casino games on offer are few, or if the overall payouts are low, it may not be worthwhile. Thankfully, Villento Casino has over 450 casino games on display as well as 16 progressive jackpots, including Mega Moolah, King Cashalot, Major Millions, Fruit Fiesta and many more. Some of these jackpots accumulate to over $1,000,000 USD from time to time.

Besides traditional casino games like blackjack, roulette and table games, Villento Casino offers a wide range of games that are categorized as “featured games” and “latest games”. In the category of featured games, the casino has Sterling Silver 3D, Poker Ride and Gold Series Multi-Hand Bonus Blackjack. Among the games that fall in to the category of “latest games” you will find Riviera Riches, Lucky Witch, Rhyming Eels, Hearts & Tarts and Thunderstruck II. In case you do not feel like going through all of the games one by one, there is a handy option available to preview the games. By previewing the games, you can easily decide whichever game you want to play. As expected, downloading the casino software is totally free if you want to try out the games for fun before playing with real money.

The security policy of Villento Casino is very strict and your personal information and transactions are kept confidential at all times. Any player at Villento casino can review their own information and transaction data using the “play check” option. Villento Casino is also a member of the Interactive Gaming Council and operate under their code of conduct guaranteeing fair and honest gaming. The casino also features independently reviewed Random Number Generators, and the results of these checks are published on the website by independent auditors.

Of course, support is never far away either, whether it has to do with banking options or gameplay. Help is available 24×7 to answer any questions players might have. Overall, Villento Casino is yet another great casino from the Casino Rewards Group – maybe not as famous as some of the other casinos they offer, but well worth a go. Good luck!

The Workings of the Typical Internet Casino Explored

It is said that – going by current statistics – we have more people playing casino games over the Internet than in brick and mortar casinos. This is remarkable, because less than ten years ago, the Internet casino concept was still at its infancy – an idea whose feasibility was still a subject of debate. Few of us could foresee a day when Internet-based casinos would threaten the very existence of traditional brick and mortar casinos. But that is exactly what has happened; in a situation where many traditional brick and mortar stores are forced to downsize, or otherwise adapt to the new serious challenge, actually threat, which is the Internet casino.

In order to understand how this phenomenal success of the Internet-based casino has come to be, it would be a good idea to explore the workings of such online casinos, as they are more popularly known.

And as it turns out, the online casino works along the same lines as the traditional brick and mortar casino, with the only difference being that it is based on the Internet (so that the players actually play the various games on their computers, through their Internet connections).

As with any other type of casino, most of the games played in the Internet casino are, more or less, betting games. These are games of chance to a certain degree, with the degree to which success depends on luck varying from game to game – so that in a game like online bingo, success is almost entirely a matter of luck; whereas in a game like online poker, success seems to be more a matter of strategy than a matter of luck. The typical Internet casino online will tend to have a number of games on offer, with what can be termed as the top Internet casino normally offering pretty much what one would expect in a top, traditional brick and mortar casino.

In most of the games offered in online casinos, the participants get to play against one another. There are of course those games where one gets to bet against the ‘house’ but those where people play against one another seem to be the most popular. The greatest advantage of the Internet casino online comes up when we look at the these games where players get to play against one another where, as it turns out, people from entirely different parts of the world can get to play together in real time. Thanks to the many things the Internet has made possible, this no longer seems like a big deal. But for those of us who were there before the coming of these technologies, such things are simply amazing. This bring together of people from different parts of the world – and also makes it possible for people who would most definitely never have gotten to play together, in the traditional order of things, to do so.

Starting to play in a typical Internet casino is quite easy, in fact easier, than getting to play in a traditional brick and mortar casino. The first step in this direction is usually to identify one such casino where one can play. Most people conduct Internet searches, on terms such as ‘top Internet casino,’ ‘best Internet casino’ or simply ‘Internet casino’ in their search for a nice casino at which to register and start playing. Most people, it would seem, identify the top Internet casino establishments at which to play through Internet search results, or through referrals by friends.

Having identified the Internet casino at which to be playing, the next step is usually to register with it. This is usually an easy process of filling a simple form (which typically completely un-intrusive). At this stage, no money is actually required from you – just basic details, which can be useful in sending prize money should one come to earn something, which is naturally what everyone joining a casino hopes for.

It is after registration that the typical online casino will require for you to load some money into your playing account in order to start playing. Some top Internet casino establishments will, however, load the first sum of money into your: to give you something that is akin to a ‘free sampling’ of their offerings, after whose exhaustion – and if you like what you got – you can proceed to add money into the account. The aforementioned strategy is usually accomplished through what are termed as a ‘no deposit casino bonus’, like where a casino offering poker and bingo gives what is termed as ‘no deposit poker bonus’ or ‘no deposit bingo bonus’.

After registering and subsequently loading money into the online casino account, one can proceed to start playing the games on offer there. As previously mentioned, one could be playing against other people (some most probably worlds away) or playing against the ‘house’ that is, the casino establishment.

Contrary to what many of us fear, the typical Internet casino will tend to be very liberal in its dispensation of justly won prize money. It is not likely to attempt to withhold the money – seeing that it has a reputation to protect. And there is no surer way to ruin the reputation of a casino, whether Internet-based or otherwise, than to make it come to be seen as one that plays games with justly won money. After all, the objective of joining a casino is to win (and get prize money). So if a casino withholds winnings, what would be the point of joining it? It is with this kind of thinking in mind that most Internet casino managers will actually go a long way to ensure that the winners of various games on offer actually get their rightfully won prize money.