How are you paid?
We are paid in two distinct ways:
- Typically, a flat fee for financial planning services determined based on the complexity of your financial profile and goals. This fee covers the costs of completing your asset inventory, reviewing your estate plan, and building your financial plan. If for any reason you are unhappy with our services, this fee is fully refundable in the first year.
- An ongoing fee for assets under management. This fee covers the ongoing management of your investment accounts by Beacon or a third-party manager, including portfolio rebalancing, tax loss harvesting, as well as most ticket charges and custodial fees tied to your accounts. It ranges from 2.00% to 0.50% per year of assets under management, depending on the size of the relationship, billed quarterly from your accounts.
Please see Beacon's most recent Form ADV Part 2A on file with the Securities and Exchange Commission for a complete breakdown of fees, available here.
What commissions do you earn?
We earn commissions on certain insurance products that are only available in commission-based form, mainly disability and long-term care insurance. We only recommend the purchase of these policies if it is in the client's best interest and explore all options, including those on which we receive no compensation, such as on policies offered through a client's employer or professional association.
We do not earn any commissions on the management of our client's investments, and our financial planning and asset management services are entirely fee based.
Increasingly, life insurance products are available that allow us to charge a fee based on the cash value of the policy, just as we would with assets under management in an investment account.
Since there is a financial incentive for us to recommend an insurance product and receive compensation, this is a conflict of interest. To mitigate this conflict, we inform clients that they are free to consult other financial professionals and implement recommendations through these other professionals.
Do you have an account minimum?
At Beacon, we want our clients to get the personal attention and access to their advisor that they deserve. Doing so requires us to limit the total number of client relationships we maintain. Consequently, we require a minimum of $1 million in investable assets for new financial planning clients.
In select instances, Beacon will engage in a flat-fee consulting relationship with new clients that does not include asset management. Services offered under this type of arrangement include establishing retirement plans for small businesses and partnerships, implementing company buy/sell arrangements, and navigating unusually complex estate planning situations. Please contact us to learn more.
Where will my investments be held?
Beacon Financial Advisors has chosen to use TD Ameritrade Institutional as the primary custodian for client accounts. TD Ameritrade Institutional specializes in working with independent registered investment advisers like Beacon, and demonstrates the scale and stability we look for in a long term partner. As of December 31, 2017 TD Ameritrade held $1.2 trillion of client assets across over 11 million accounts.
How will I know my account balances?
All clients can access their daily account values, portfolio holdings, and activity through our client portal. Monthly statements are mailed directly to a client's address of record, or clients can choose to go paperless and have statements delivered electronically instead.
What does it mean to be a Registered Investment Adviser (RIA)?
Beacon Financial Advisors is a Registered Investment Adviser* regulated by the U.S. Securities and Exchange Commission. This means that our advisors have a fiduciary duty to act in the best interest of our clients at all times and to make investment recommendations consistent with our client's best interest.
While a fiduciary duty may seem like common sense, financial advisors who are "registered representatives" or stockbrokers operate under a less stringent standard known as "suitability." Under the suitability standard, an investment must be suitable for the client at the time it is purchased, but the advisor is under no obligation to ensure the investment remains appropriate for the client as time goes on. However, all advisors including registered representatives are held to a fiduciary standard when providing advice to clients regarding retirement accounts.
For a discussion of the difference between a Registered Investment Adviser and other types of financial advisors, see the following article in Forbes magazine. Please note this article dates from 2012 and does not address recent regulatory changes from the Department of Labor holding all advisors to a fiduciary standard when providing advice on retirement accounts.
*Any references to Beacon Financial Advisors as a Registered Investment Adviser do not imply a certain level of skill or training.
I still have more questions.
We're happy to answer any additional questions you may have about working with Beacon. Please contact us or request a consultation to learn more.