There is probably no other industry that makes their fees as clear as mud as the financial industry.

I founded Align Wealth to change the way financial advice is delivered. That means not only how I provide advice, but also how you pay for it.

Think about this. When you're paying other professionals like your accountant or lawyer, are they charging a fee based on your practice's revenue or how much you have in your investment accounts? I'm guessing not, right?

I'm here to tell you this: Do not fall into the percentage trap.

For decades the most common compensation model for advisors has been to charge a % of Assets Under Management (AUM %). Typically this is about 1% of your investment accounts. This sometimes may include some level of financial planning, other times its just investment management.

Let's put this into context.

Let's say Dr. Atlas has an investment portfolio of $500,000 and pays her advisor a 1% fee of $5,000 annually. As her investments grow, so does her fee. Over the next year, the markets have done well and she saw a 10% return, her portfolio is now $550,000 and her new fee is $5,500. Now her advisor might argue that they deserve it because they helped increase the value of her portfolio.

Well, what happens if Dr. Atlas were to receive an inheritance from her beloved Grandma Jean of $250,000 and she decides to invest that? Her portfolio is now $800,000 and is accompanied by an $8,000 fee at 1%.

Her fee has now increased by 60% from the original $5,000 annual fee. Did the advisor bring 60% more value to the table?

And what if she decided to take out $250,000 to buy a rental property next year? There is a clear conflict of interest as her advisor isn't going to be inclined to watch their fee drop by $2,500.

Here is the thing, this is a dirty little secret that the financial services industry doesn't want you to know.

There is no difference in managing a portfolio of $250,000, $500,000 or $1,000,000. It's all the same, and quite honestly, managing investments have become pretty commoditized thanks to advances in technology over the last decade.

So what's the solution? Flat-fee financial planning and investment management.

Full-service financial planning that includes investment management for a flat fee, and is usually paid as a monthly subscription. A fee that does not fluctuate based on how the market is performing or is biased towards only serving those with large investment portfolios.

Who is best suited to work with a flat fee financial planner?

When I decided on the flat fee model I had the early to mid-career Chiropractor in mind. This model is ideal for those that are earning a good income and have a successful practice but don't have a large $500,000+ portfolio (yet). Which is often what most advisors will set as a minimum for them to consider working with you. 1% of $0 just doesn't fly for their business model.

However, it's also an attractive model for those that have built wealth in their investment portfolios and are looking for more comprehensive advice that is specific to Chiropractors. A client with a $1,000,000 portfolio being charged the typical 1% would typically see their fees come down in our flat-fee model.

Flat fees are the future. The people that need financial advice are getting younger and savvier. They want a high-impact level of service from a financial planner that understands them. And they want all this at a price that makes sense. The demands are changing. Advisors and planners will have to change, too.

Choosing the right financial planner is about more than just their pricing model. Sure, a flat fee structure may work for some, but what's truly important is finding someone competent, ethical, and free of conflicts of interest. A planner who ticks these boxes, even if they don't use flat fees, is worth their weight in gold.

When searching for a planner, look for someone who you can trust, someone who speaks the same language as you, and most importantly, someone who is upfront and transparent about their compensation. Don't just settle for any planner, choose the one that fits you and your financial goals the best.