beliavsky[at]aol.com wrote:
- quote -

Generally no, under Section 205(a)(1) of the Investment Advisers Act of
1940, which prohibits performance fees based on a share of capital
gains. But there are exceptions - the most likely ones for a planner are
with a client who meets minimum net worth or assets-under-management
requirements. You should find lots on this if you google "fulcrum fee"
or "rule 205-3".

Performance fees and fulcrum fees are unusual in that setting though.
Planners aren't generally trying to beat a single benchmark, that's more
likely for an adviser to a mutual fund - which is another one of the
exceptions. And if you choose to charge them, compliance is
significantly more complicated. The SEC doesn't like them, for reasons
that become obvious when you apply a little game-theory.

-Tad

On Jan 24, 1:23*pm, beliav...[at]aol.com wrote:
- quote -

It can be done, but it requires the advisor to jump through some extra
hoops AND the investor has to meet certain requirements. The company
that I use for performance fee based accounts requires that the
investor have a minimum net worth of at least $1.5M before they are
allowed in the performance fee program.

Gene E. Utterback, EA, RFC, ABA

I'd like to ask a somewhat related question. If a financial planner
wants fees to depend on investment performance, is that allowed? For
example could a planner who thought he could choose actively managed
funds that outperform the indices set his fee at

0.5% of AUM + 10%*max(portfolio_return - Wilshire_5000_return,0) ?

I think I've read that mutual funds, unlike hedge funds, are not
allowed to have "asymmetric" performance-based fees. The fee structure
above is asymmetric (has optionality for the planner) because of the
"max" function.

Flycaster wrote:
- quote -

Adam,
That's odd...perhaps you happened to hit on a bunch of firms that don't
do fee-based asset management - for example that may be done through
outside managers or under an affiliated firm name or something like that.

If you do fee-based advisory work, meaning you're registered as an
investment adviser, your fees must be disclosed on Schedule F of Form
ADV Part II. This is the response to Item 1D on ADV-II, and would be
labeled as such. (1D reads: "For each (category of services) describe on
Schedule F...applicant's basic fee schedule, how fees are charged and
whether its fees are negotiable")

For an example try Evensky & Katz - a pretty well-known advisory firm in
Florida, the principal gets quoted a lot in the media. I think they're
geared to high net worth clients and their fee schedule reflects that in
the fee brackets.

-Tad

Tad,
That's the kind of search info I am looking for. However, I've looked
up several advisors in my area and none have listed their fee schedules
within the form. In fact, in reviewing several ADV Part IIs, there was
nothing about fees at all. Perhaps I am doing this wrong? Could you
give me a name to look up that will describe a fee schedule so I will
know what to look for?
Adam
To email, erase "forgetit"

TB wrote:
- quote -

On Jan 22, 4:29*am, "Chris Cowles" <NoS...[at]ForMe.Net> wrote:
- quote -

Sorry.
100bps = 1.00%

Chris Cowles wrote:

- quote -

basis points or 1/100 of 1% (i.e. .01%)
So 100 bps = 1%
35 bps = .35%

"The Fed cut the discount rate 25 basis points or 1/4% today" is what
they say.

JOE

"kastnna" <kastnna[at]auburnalum.org> wrote in message
news:4641470d-69ee-45e8-a168-f9a156af4287[at]e6g2000prf.googlegroups.com...

- quote -

bps? wazzat?

Flycaster wrote:
- quote -

Flycaster,
Interested in a sight-casting approach? If so..go here:
http://www.adviserinfo.sec.gov/IAPD/...d_SiteMap.aspx

click on "Investment Adviser Search" and type in the name of a firm in
your area. Click on the name, pull up their record, then scroll down to
where it says "Part 2 Brochures" in the left pane. Click that to
download a PDF version of their Form ADV Part II, which is a regulatory
filing, required of all investment advisers, which includes details on
fee schedules.

Not all firms have their Part II online but the system is gradually
transitioning to that so you should be able to find hundreds of them.

There's a big variation in the level of services provided for a given
fee, but what you get should be described within each ADV-II.

-Tad

On Jan 21, 6:51*pm, Flycaster <adam999forge...[at]comcast.net> wrote:
- quote -

It's dependent on the particular case, but in general my firm charges:

90-100 bps for under $250k,
75-90 bps from $1M - $250k,
75-35 bps for accounts over $1M

Keep in mind that's just for strict asset management (an act in which
our office rarely engages). Most of the assets we manage are also
accompanied by comprehensive financial plans, life insurance,
disability insurance, LTC, annuities, trust establishment, estate
planning, etc, etc.... These other facets provide revenues and many
planners (us included) will reduce AUM fees to compensate this.

FYI, our investment strategy is low-cost ETF based. Even for the
smallest investors we try to keep total fees under 1.5%. I didn't
(don't) set the fees, but I also don't think they are unreasonable.
Hope this begins to answer your question.

I would like to get a feeling for what the average size independent
certified financial planner would charge (percent of assets under
management) to manage an account on an asset based fee schedule. I know
that the fee schedules change with AUM, so could I get some kind of
range. Or, perhaps you could direct me to where I can get this
information. Thanks.
--
To email, erase "forgetit"