Fees and Compensation
Financial Planning and Investment Consultation (Hourly Based)
For clients who opt to engage in hourly services, the hourly fees for financial planning and investment consultation services are billed at $200 per hour. The time is billed in six-minute increments, and a partial increment is billed as a whole. When the client and GCFP sign the “Client Service Agreement Hourly Engagement” contract, the client will receive an estimate of the time required to complete the consultative services or financial plan that will depend on the level and scope of services to be provided.
GCFP may require an initial deposit of up to one-half the highest estimated fee range in order to initiate the financial planning or investment consultation services. Fees for the balance of the services are billed upon delivery of the consultative services or completed financial plan.
A financial plan is priced based on the hourly rate, and the typical fee range is $800 - $3,000, depending on the complexity of the client’s situation. The financial plan is designed to help the client with all aspects of financial planning and may be comprehensive or more narrowly focused.
Hourly financial planning may be paid via check or credit card.
Since financial planning is a discovery process, and if the client’s situation is different than disclosed at the onset of the engagement, a revised fee will be presented for mutual agreement. The client must approve the change of scope in advance of the additional work being performed when a fee increase is necessary.
The financial plan may include a cash flow analysis, net worth statement, a review of investment accounts, analysis of asset allocation, rebalancing recommendations, strategic tax planning, review of retirement accounts and recommendations, what-if scenarios, retirement income withdrawal strategies, review of and recommendation for insurance policies, estate planning documents and education planning/funding.
Detailed investment advice and specific recommendations may be provided as part of a financial plan. Implementation of the recommendations is at the discretion of the client.
Financial plans and investment consultation on an hourly basis generally conclude upon delivery of the consultative services or the presentation of a written financial plan, but clients can continue to engage GCFP, or re-engage GCFP at any time, on an hourly basis at the rate of $200 per hour.
Investment Management Services and Fees (Continuous Supervision)
GCFP requires all our clients to sign an “Asset Management Customer Agreement” outlining all aspects of our investment management services and fees.
The goals and objectives for each client’s investment portfolio are identified and documented through the use of an “Investor Profile Questionnaire” and an “Investment Policy Statement”. The Investment Policy Statements (IPS) are periodically reviewed with the client and updated as required.
Clients for whom GCFP has continuous investment supervision, or Assets Under Management (AUM), receive quarterly e-mail updates and 3rd party research data. In addition, clients receive monthly statements directly from the account custodian. The fees will be billed monthly in arrears.
The Adviser provides portfolio review and rebalancing, as needed, for the assets held under management at a minimum quarterly basis.
Although there is no minimum account size, the minimum fee for investment management services is $300 per quarter, or a minimum of $1,200 per year.
Family accounts may be grouped when considering account size for fee calculations. Investment management fees are billed monthly, in arrears, and fees are included on the monthly statements provided by TD Ameritrade. Detailed invoices and calculations are available to the clients upon request. In addition, GCFP will provide a yearly summary for tax reporting purposes, if requested by the client. However, effective for the tax year 2018, investment management fees will no longer be deductible on Schedule A.
The first quarter fees for new clients are pro-rated, and clients may cancel their agreement within five days of signing a GCFP contract without incurring any fees. Fees are deducted from the client’s account to facilitate billing. The client must consent in advance by signing the “Asset Management Customer Agreement” to direct debiting of their investment account and must also sign a consent form with the custodian. GCFP discloses to client in the contract that it is the client’s responsibility to verify the accuracy of the fee calculation. The monthly fee for new or departing clients will be prorated based on the new contract date or date of contract termination.
GCFP is considered to have limited custody, due solely to the fact that the fees may be withdrawn directly from the custodian. No financial requirements result from this definition of custody.
GCFP reserves the right, but is not obligated, to assess a lower fee to those clients who had contracts with GCFP prior to March 27, 2017. Otherwise, fees are not negotiable.
In addition to the fees paid to us, custodians may charge transaction fees on purchases or sales of certain mutual funds, bonds or stocks. These transaction charges are usually small and incidental to the purchase or sale of a security. When transferring assets and/or closing accounts with brokerage firms, there is generally a $50 - $100 “close-out” fee charged that reduces the net amount of a client’s transferred assets. Clients who have accounts with one or more brokerage houses are subject to these fees at each firm when transferring funds and/or closing accounts.
Mutual funds and Exchange Traded Funds incur internal operating expenses referred to as an expense ratio. For example, an expense ratio of 0.50 means that the mutual fund company charges 0.50% of the fund’s value annually for their services. These fees are in addition to the fees paid by the client to GCFP, and we do not receive any portion of these expenses.
Transaction and custodial fees assessed by the client’s broker/dealer or custodian are disclosed in the current, separate fee schedule of the custodian. GCFP does not share in any portion of the brokerage fees/transaction charges imposed by the custodian.
GCFP does not receive “trailer” or 12b-1 fees from any investment company that it recommends. The fees charged by these companies are detailed in prospectuses or product descriptions and clients are encouraged to read and consider these documents carefully.
In order to minimize expenses and fees incurred on investments, GCFP, most often recommends “no load” products (e.g. no commission). We do not sell annuities or insurance products that usually have commissions, but if GCFP recommends an insurance broker, we will not receive any commissions or referral fees.
GCFP Adviser primarily recommends and invests in highly liquid, low expense, no-load stock and bond mutual funds, Exchange Traded Funds (ETFs), Exchange Traded Notes (ETNs) money market accounts, brokerage CDs and individual bonds (corporate, agency, muni). Examples of preferred no-load mutual funds include Dimensional Fund Advisor (DFA) and Vanguard mutual funds. GCFP was approved as a DFA fund provider in February, 2016. DFA only offers its funds through select advisors who believe in the DFA investment philosophy.
Termination of Services
Clients may terminate any agreement with GCFP within five days of signing the Customer Agreement or Hourly Engagement without incurring any fees. Any time after the five days, Hourly clients may terminate the Agreement by notifying GCFP in writing and paying the hourly rate for the time spent on the advisory engagement prior to notification of termination.
Since GCFP bills in arrears for clients for whom we provide investment management services, monthly fees will be pro-rated to the date of termination. The minimum fee charged will be $1,200, less monthly fees already deducted. The client is responsible for notifying the broker/dealer or the custodian to remove trading authority and fee deduction authority from GCFP. After termination of our agreement, movement of funds will become the client’s responsibility.
If the client verbally notifies GCFP of the termination and does not follow this up with a written notice, GCFP will record the termination in its records and will send its own termination notice to the client as a substitute.