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Famously and fiercely solo James Osborne somewhat sheepishly doubles headcount at Bason to two after the fatigue of saying 'no' wore on him

For seven years,RIA, flat-fee evangelist and blogger in Greenwood, Colo. doggedly stayed solo and got to $200 million but now he has McKenzie Ebbesen; and she shares his discomfort with 1% fees.

Author Oisin Breen March 5, 2019 at 9:17 PM
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McKenzie Ebbesen: While I agreed with the general philosophy of investing and planning ... I did not agree with the 1% fee structure and the need to use mutual funds to justify the fee.

People Moves



March 6, 2019 — 7:52 PM
I’m not sure how an advisor with $200MM in AUM and 84 clients is found all he can for that client unless he isn’t doing much at all?? I spend untold hours with clients working on helping them with their businesses, negotiating contracts, loans, partnerships with others and unique private investments. There is now way you can do all that for $4,500/ year. If you’re bringing value you’re worth more.
Jim Rooney

Jim Rooney

March 7, 2019 — 6:36 PM
It's not that I don't believe in flat fees. But I'm not so sure that they can be totally fair to the client, the firm, AND your other clients. I look at my own practice - I've got some single, retired widows with $300K in AUM, and a single stream of income (Social Security). I then have some clients that are married, have numerous sources of income (two Social Security streams, multiple pensions, deferred comp, maturing stock options, annuities, etc.), $3-5M AUM in 5-10 different accounts (IRA's, Roths, Individual Joint, Trusts, 529's for grandkids, etc.), multiple homes, and their lives are just much more complex. I might talk to that widow once or twice a year to see how the grandkids are doing, because there is simply not much to talk about when her investments are doing fine. The wealthy couple, on the other hand, we may talk 1-2 times per MONTH as we are dealing with tax issues, cash flow issues, real estate issues, etc. My point is, unless all of your clients are either very simple, or very complex, you are STILL making much more or much less off different clients. So it's easy to say that a flat fee is more "ethical" or "fair", but I believe all it says is that you are going to do the same amount of work for every client (which is simply not true). Don't get me wrong, I am NOT saying that the AUM model is *right* or the flat fee model is *wrong*, more that I just can't reconcile in my head how it is more "appropriate" or "fair" for ALL of my clients. After all, when I quote for financial planning work, I charge more for more complex cases, and charge less for less complex cases. How is this any different?
Jim Rooney

Jim Rooney

March 7, 2019 — 6:41 PM
I should also note that I made the false assumption that all RIA's are doing financial planning work like myself. I suppose if all you are doing is investment management, then maybe you ARE providing the same level of service to all clients. In my case, ALL of my clients receive extensive planning work (in addition to investments), which is why I have a hard time visualizing a flat fee (although i do charge flat fees for planning-only work, based on complexity).
Brooke Southall

Brooke Southall

March 7, 2019 — 6:42 PM
Josh and Jim, Hadn't you heard that web-based comments are supposed to be acerbic and unthoughtful? But seriously, thanks for the good and good-spirited thinking here. -Brooke

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