Dynamic Advisory Fee

“Transparency is at the heart of everything we do”

Introducing the Vaultis Dynamic Advisory Fee

In the world of wealth management, understanding fee structures is crucial for investors seeking to maximize their long-term financial success. The fees charged by financial advisors can have a profound impact on portfolio growth and the achievement of financial goals. Transparency in fee structures is not merely a desirable feature; it is an essential component of a trustworthy advisory relationship.  Below is a brief introduction to various industry fee models and the Vaultis Dynamic Advisory Fee. 

Dynamic Advisory Fee

Vaultis Private Wealth's innovative Dynamic Advisory Fee model addresses the shortcomings of traditional fee structures while prioritizing transparency and client interests. This revolutionary approach offers a percentage-based advisory fee with built-in fee caps, designed to provide significant cost savings as client assets grow. The model also includes a clearly stated charge for direct costs, ensuring full transparency. As portfolios increase in value, the effective fee rate decreases, benefiting clients while maintaining advisor motivation to provide exceptional service and pursue optimal investment strategies.

This unique structure eliminates the misalignment often found in traditional fee models, where advisor compensation may increase disproportionately to the value provided. As client assets grow, the potential for cost savings becomes increasingly apparent, offering greater value and cost-efficiency compared to industry standards for accounts of similar sizes. By implementing this Dynamic Advisory Fee model, Vaultis Private Wealth demonstrates its commitment to providing high-quality wealth management services with a fee structure that truly aligns with client goals, setting a new standard in the wealth management industry.

Brokerage

The traditional brokerage fee model, where financial advisors earn commissions based on transactions or product sales, often creates potential conflicts of interest. This structure can incentivize frequent trading and the promotion of high-commission products, which may not always align with clients' best interests or long-term financial goals. The commission-based approach also raises questions about the objectivity of financial advice and can lead to a lack of transparency in advisor compensation. As investors become more aware of these challenges, many are seeking alternative fee structures that offer greater transparency and better alignment between advisor and client interests.

Advisory

The traditional advisory fee model, based on a percentage of assets under management (AUM), aims to align advisor and client interests but has notable shortcomings. As portfolios grow, advisors' compensation increases proportionally, often without a corresponding rise in service levels, potentially leading to disproportionate rewards for market-driven growth. Many firms use complex tiered fee structures, which, while attempting to provide cost savings for larger portfolios, can be difficult for clients to understand and predict. The lack of a definitive fee cap in most traditional models means that as portfolios grow significantly, fees can reach substantial amounts, potentially eroding long-term returns.

Flat Fee

The flat fee model offers simplicity in financial advisory compensation, charging a set annual amount regardless of portfolio size or performance. However, this approach creates a potential misalignment of interests, as clients pay the same fee regardless of market performance. This structure may inadvertently incentivize advisor complacency, as their compensation remains static irrespective of portfolio growth or decline. While offering clarity in pricing, the flat fee model doesn't account for market performance or varying complexities of client situations, potentially leading to inequities in value received for fees paid, especially during market downturns.

Discover how much you could save with Vaultis Private Wealth's Dynamic Advisory Fee model by scheduling your complimentary fee audit today.