PRM is a fee-based advisor. Investment advisory clients pay a quarterly fee based upon assets under management. If a client incurs any brokerage commissions from stock transactions, these commissions are used to offset the fees that would otherwise be due.
When you are an advisory client, we charge for assets under management as described below However, we do not charge for your questions and discussions about estate planning, the need for more or less life insurance, the need for long-term care insurance, retirement decision-making and implementation, stock option decisions, better ways to fund college expenses, quarterbacking the family's affairs in case of an untimely death, etc. This other advice is part of being an investment advisory client. Some clients have said. "At last, a place to ask my ‘dumb' questions on estate planning, gifting ideas, taxes and retirement contributions without an hourly meter ticking."
Of course, there are times when we don't have the answers or it requires a complicated answer. In these situations, we will refer you to an estate planning attorney or CPA if you do not already have one. In addition, we do not get involved in drafting or interpreting trust or other estate planning documents and don't prepare tax returns. We do, however, help assemble tax information on your accounts for your tax preparer.
If the client is investing in stocks and there are commissions involved in any transactions, those commissions are used to partially offset the advisory fees that would otherwise be due.
The costs of the plans are far below what we could charge on an hourly rate. Plans may have 15 to 30 man-hours involved analyzing, preparing and explaining the plan. Plans with the estate planning section would normally cost $3,000 to $5,000 or above. Our retirement plan is an effective way for the two parties to get acquainted. It enables prospective clients and us to determine whether we would like to work together in the years following.
Having a plan prepared for you does not obligate you in any way to have an on-going advisory relationship. In spite of that lack of obligation, probably more than 90% of the clients for whom we prepare plans become on-going advisory clients. This is a service business, and trust is an important ingredient. The plan helps prospective clients determine whether they can trust us and can rely upon us for knowledgeable advice.
A fee-based advisory relationship with PRM means that we are constantly monitoring financial markets, and when we believe our clients should be doing something, we call them. We recommend adjustments, and, if approved, we make the adjustments. Commission-based brokers or advisors tend not to work that way. Since we are fee-based, we won't hesitate to call you and say you should sell a no-load mutual fund or stock and buy another if it's a good idea for you. We also won't call you just because we need to generate a commission or meet a quota. Any commissions are used to offset the fees that would otherwise be due. Our advisory services do not stop with the sale of an investment to the client like many commission-based advisors.
Clients tend to prefer our fee-based services because it means we are regularly
monitoring your account
A fee-based relationship is important for many people looking for somebody that they can trust to manage their financial affairs. When people are looking for an advisor to help them create financial independence in their lifetime and multi-generational wealth for their heirs, they do not want our compensation divorced from their results or based on our needs rather than theirs. A fee-based relationship is fair and appropriate for both sides.
Please refer to our
Securities offered through Mutual Service Corporation, Member NASD/SIPC. Investment advisory services offered through Pattern Recognition Management, Inc., a registered investment advisor.
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