All-In Service at an All-In Fee


Transparent · Comprehensive · Fiduciary


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Case Study: Ty & Rachel

  • Total First Year Cost: $16,962.50
  • Professional’s Pay: $13,790

Case Study: Ty & Rachel

(Note: These case studies are hypothetical, do not involve an XYFP client, and should not be construed as a guarantee.)

Situation

Age: Mid Thirties
Stage: Mid-career with young children
Income: $165,000
Investment Assets: $135,000

Financial Professional

Firm: Southeastern Mutual
(Insurance-Based Financial Services Company)

Professional: Josh Anderson, CLU®

Expertise: CLU®: Chartered Life Underwriter™
(Life Insurance Expert)

Products & Services Purchased

  • Financial Plan: $2,000

Using simple software, Ty & Rachel are educated on their financial picture at a basic level. They are given a 80-page binder as their financial plan.

  • Permanent Life Insurance x2: $3,600/y Each

Josh Anderson proposes permanent life insurance so they can rest easy knowing that one will be taken care of if something happens to the other but fails to propose an alternative solution of purely term insurance complimented by investing.

  • Investment Solution: Mutual Funds (A-Share): $7,762.50

Josh Anderson recommends A-Share mutual funds. Since he does not have enough licenses to help clients invest in individual stocks, he sells clients investments with an up-front fee of and receives a 5% commission on a 5.75% fee charged to the clients. Josh defers ongoing management to the mutual fund manager.

Other Services Purchased

Because Southeastern Mutual does not provide all essential services, Ty & Rachel needed to go elsewhere to get these.

  • Will, Power of Attorney, Health Directive: $2,000

Ty & Rachel seek out an attorney to provide the basic estate documents. Future amendments will cost $250 each. They must schedule another meeting with their financial professional to align the beneficiaries with their estate plan.

  • Tax Preparation: $250

They employ a CPA to prepare their tax returns each year for $250. Each year they must try and triangulate their CPA and their Finncial Professional to ensure everyone is on the same page. Tax planning is not included in their $250 fee.

Financial Professional Compensation

  • Financial Planing Fee: $2,000

A flat fee to pay the professional to explore all areas of finance.

  • Life Insurance Commission: $5,040

$7,200 in annual premium at a 70% commission rate.

  • Investment Commissions: $6,750

$135,000 at a 5% commission rate.

  • Total Client Cost: $16,962.50
  • Professional’s Pay: $13,790

Results:

Plan: $2,000 | Premiums: $7,200 | Tax Prep: $250 |
Investment Charge: $7,762.50 |

Plus $2,000 for the Will. A trust would have been $8,000 with the attorney.

Josh Anderson will earn $13,790 from this one client in the first year, mostly due to exorbitant commissions. He will also earn ongoing fees and commissions every year after.

*Firms and financial professionals vary widely in their services and costs.

Case Study: Sarah & Mike

  • Total Annual Cost: $2,025
  • Planner’s Pay: Salaried

Case Study: Sarah & Mike

(Note: These case studies are hypothetical, do not involve an XYFP client, and should not be construed as a guarantee.)

Situation

Age: Late Thirties
Stage: Sarah recently changed careers, with young children
Income: $175,000
Investment Assets: $135,000

Financial Planner

Firm: XY Financial Planning
(Independent Fee-Only Fiduciary Financial Planning Firm)

Professional: Benjamin Gibson, MBA

Expertise: MBA working under CFP® Professionals
(Masters of Business Administration working under
Certified Financial PlannerTM Practicioners)

Services Received

  • Financial Planning: Included

Using sophisticated software, Sarah & Mike are educated on their entire financial picture. They are given a One-Page Financial Plan with succinct recommendations.

  • Insurance: Term Life Insurance x2: $370/y each

While Sarah & Mike still need life insurance coverage, they are not convinced that a high-preimuim, permanenet life insurance policy is the right solution. A term life insurance poilcy will suffice. Ben receives no commissions as he works for a fee-only firm.

  • Investment Solution: Ongoing Advisory Services

Sarah & Mike discover the 5×5 investment model. It’s the first time investing has made sense to them. They commit to it. The model has historically returned 10% before fees, though future performance is uncertain. They are free to leave anytime as nothing is locked up behind up-front fees and commissions.

Other Services Included

Because XYFP offers an all-in model, Sarah & Mike will receive estate planning documents, tax prep and tax planning included in their all-in fee.

  • Will, Trust, POA, HD, and TODs: Included

Sarah & Mike get their essential estate documents, including a trust to avoid probate and delays, with their financial plan. Signed, sealed, and delivered. All beneficiaries are coordinated and aligned wihtout any extra effort from Sarah & Mike, since it is all completed in-house.

  • Tax Planning, Prep, and Filing: Included

Tax Planning strategies are estimated to save Sarah & Mike $210,000 in extra taxes over their lifetime. XYFP also prepares and files their taxes each year. Because their professional already know everything that is going on, tax season becomes quick and painless for the first time ever.

Total Cost

Sarah & Mike get everything for 1.50% of their portfolio, all-in. They’re portfolio is charged on XYFP’s standard all-in fee schedule (below).

  • On the first $500,000 of Assets: 1.50%
  • Between $500,000 & $1,000,000: 1.33%
  • All Assets Above $1,000,000: 1.08%

Financial Planner Compensation

  • Total Client Cost: $2,025

The All-In fee for Sarah & Mike is 1.50%. XYFP’s fee goes to paying the salaries of the advisors and staff that allow XYFP to provide all these services.

  • Planner Compensation: Salaried

Results:

  • Total Annual Cost: $2,025/yr

Planing, Investments, Tax, Estate, and everything else: $2,025.

All Financial Planners and Staff at XYFP are salaried. There are no commissions and no sales quotas. They get paid the same regardless of what is recommended to the client. Thus, all recommendations are in Sarah & Mike’s best interest.

*All our services are charged according to to our fee schedule or $450 per quarter, whichever is greater. Clients with less than $120,000 will be subject to our minimum fee. All-In Services are charged quarterly and require a four quarter commitment. After 12 months you may continue with our All-In Service or switch to Investment Only and pay 1.5% of invested assets (minimum $150 per quarter). See the Financial and Investment Planning Agreement for more details.

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