Manage Risk, Seek Performance at a low-cost flat fee

shutterstock_28433899 manage risk seek performanceAdvice formerly only available to the elite  — it’s time for the rest of us.

When in the commercial a son asked his father how the fees worked for his father’s asset management account, the father was convinced he was in the know regarding how fee based management arrangements are structured.  The truth is, it is not the only way it works any longer!

When you harnesses the power of today’s technology to take advantage of state-of-the-art secure data centers and you find companies which are committed to serving a larger segment of society with solid money management programs, the ability to have accounts managed for a fraction of the cost is not only possible but wise to consider.

Knowing the consequences of Do It Yourself retirement account management AND the impact paying high fees can have regarding opportunity costs  (as shown on the the Stop Money Transfer page) the use of low-cost or flat fee management programs provides you advantages never previously available.

How is this possible?

technology

Building systems to serve clients of brokerage houses has taken a major capital outlay and the backing of large institutions with hundreds of employees to handle individualized trades.  It was the first step in a management process which catered to the elite who knew the advantages of using professional help.

However, at the exponential rate technology has advanced, companies determined to do things differently and create systems for the rest of us, are becoming a concern to institutions where layers of staff, salespeople and financial producers need to get paid.  Using a percentage fee for assets being managed may no longer fit the fill for investors.

We asked CPA Michael Hartmann, an award winning asset manager dedicated to providing top-of-the-line investment advice, to explain why low cost and/or flat fee management is now available to everyone.

Mr Hartmann explained the system he uses for subscribers for his management program.  “Building the system required a model that could search and filter thousands of mutual funds across hundreds of companies for the right fee structures, types of accounts and investment results, testing the funds against an existing benchmark, and then repeating the test over tens of thousands of different conditions takes the computing power only available today”.

First it is important for individual to understand the differences in asset management fee structures.  If possible, it is good to experience how a flat fee system works”.

(In the PFP program you are provided the opportunity to test drive a flat fee program without any cost for one month).

According to Mr. Hartmann, access to the data or processing power just to develop the model he uses to manage investment accounts was not available even 10 years ago. Mr. Hartmann won international recognition for the study documenting how management using his management process works and has consented to a special arrangement to provide this same level of investment management for PFP subscribers who wish to take advantage of his offer.

Low Cost and/or Flat Fee management programs allows an investor to Wealth Transfers caused by high cost fee structures.

According to Mike Hartmann, “The cost of management in the past was driven by the system’s limitations and time needed to execute the steps in the system. Because all these things are required:

  • you need access to holdings from numerous places
  • the data set to be analyzed is immense
  • you need custodians with a wide range of investments available at no transaction cost
  • you need to execute the trades efficiently.

Happily, today’s databases and data interfaces create significant efficiencies of scale, so all of these potential hurdles can be overcome.

The old, existing financial compensation model for managing a person’s portfolio no longer makes sense. A financial advisor should be paid for the advice, not for the process of managing investments.

Providing financial advice is a very personal process and needs to be specifically tailored. The process of providing investment advice, on the other hand, is a very mathematical process that requires a high-quality, validated investment model, applied and executed in a very cost-efficient manner.

Most advisors charge a typical 1% annual fee on assets under management. 1% is more or less average, but there is no actual limit except that it be deemed “reasonable” by the Securities and Exchange Commission. This makes no sense because the effort and expertise required for asset management is the same, regardless of the size of the account.

The PFP program addresses the Wealth Transfer dilemma experienced by investors.  The program provides subscribers with information about high-quality low cost and/or flat fee professional investment management services.  With the PFP subscription, you are invited to experience using this type of system with a free trial offer provided as part of a negotiation with Wealth Net Advisors. Wealth Net Advisors, Inc. is a federally Registered Investment Advisor firm which uses a flat fee system, regardless of the size of the account advised. According to Mr. Hartmann “Because technology has reached today’s advanced level, the advice engine can calculate modern risk-to-opportunity metrics far beyond those applied by manual asset allocation strategies.”