I do not manage your money and I do not sell anything.
Durham, and nationwide by video
Five ways this industry gets paid. 3 of them are struck out here.
Not because the other three are fraudulent — they are legal, common, and often disclosed. It is that each one quietly makes a particular piece of good advice expensive to give.
Flat fee for a plan
How I am paid
An agreed figure for a written plan, paid by you.
The conflict it still createsThe conflict here is that a plan is a one-off, so there is an incentive to make it longer than it needs to be. You will see the scope before you agree the fee.
Hourly
How I am paid
An hourly rate for sessions on a single decision, paid by you.
The conflict it still createsThe incentive is to take longer. Sessions are quoted with an estimate of hours up front and I tell you when a question does not need a second one.
A percentage of your assets
Not how I am paid
An annual fee, usually around 1%, taken from the accounts a professional manages for you.
What it does to advicePaying down a mortgage, buying an annuity, or giving money to your children all shrink the fee. So does telling you to keep cash. Those are exactly the conversations you need to be able to have.
Commission on products
Not how I am paid
A payment from an insurer or fund company when you buy something.
What it does to adviceThe products that pay most are rarely the products that suit most. This is the model behind almost every piece of financial advice that felt like a sales meeting.
Free, paid by somebody else
Not how I am paid
No fee to you at all, because the compensation comes from the firm's own products.
What it does to adviceIf you are not paying, the advice is being paid for by whoever is. That is not a scandal, it is arithmetic, and it is worth knowing which one you are in.
Which sounds like a list of things I am not, and is really a list of conversations we can have. Nobody in this industry can tell you honestly whether to pay off your mortgage if their fee shrinks when you do.
- Accounts held
- None
- Percentage taken
- None
- Products sold
- None
- A written plan
- $4,200
What a plan actually contains.
Seven sections, thirty to fifty pages, and one page at the front that is a numbered list of what to do. That last page is the part people use and the rest is why it says what it says.
The whole outline01Where you actually are
Net worth, cash flow, and what your money is doing right now. This part is bookkeeping and it is usually the part that changes people's minds.
02The decision in front of you
The reason you rang, worked through properly with the numbers, including the option of doing nothing.
03Cash and the year ahead
How much should be liquid, where it should sit, and what it is for. Boring, and the thing that most often prevents a bad decision.
04Tax, as it applies to your situation
Account types, ordering, and what to do in which year. Not tax preparation — your accountant does that, and I write to them.
05Insurance and what would happen
What breaks if somebody dies or cannot work. I do not sell any of it, which is why this section sometimes says you are over-insured.
06Retirement, as arithmetic
What has to be true for the numbers to work, and what to change if it is not. No projections dressed up as predictions.
07What to do, and in what order
The last section and the one people actually use. Numbered, dated, and short enough to put on the fridge.
There is no market commentary on this site and there never will be.
I do not know what markets will do and neither does anybody publishing a monthly view on it. Planning is arithmetic about your own life, and it works better when nobody is pretending to forecast.