There are three basic models for paying for full-service investment and financial planning guidance - fee-only planning (flat fee/retainer/hourly), asset-based advisory fees, and traditional transaction-based brokerage commissions. Each of these models has advantages and limitations relative to the others, and which model(s) fits best will likely depend upon individual client circumstances and interests. At Financial Planning Hawaii, we believe it is important to clearly disclose how we are paid and to offer all three service models to our clients. That said, most of our clients choose to work with us under the tiered asset-based fee model. presented below
The table below represents Financial Planning Hawaii’s standard tiered fee schedule for clients who enlist us to provide financial planning services under an asset-based advisory agreement.
Assets Under Mgmt*
*Annual minimum platform fee = $150
** Fee levels are assessed based upon the total assets of all accounts in the billing household.
Under the asset-based compensation agreement, we will serve in a fiduciary capacity, but we do not accept discretionary trading authority. For more specific information on the scope of planning services provided, please read our Delivery of Services Agreement.
The investment management platform for our asset-based clients is provided through J.W. Cole Advisors, an SEC-registered investment advisory firm. Clients have their choice of having their accounts held with National Financial Services (NFS) (a Fidelity Investments company) or with TD Ameritrade. FPH does NOT accept discretionary trading authority over any client accounts.
Disclosure documents pertaining to Financial Planning Hawaii’s asset-based service model are provided below.
- J.W. Cole Advisers, Inc, SEC Form ADV Part 1 2019
- J.W.Cole Advisers Inc., SEC Form ADV Part 2A - Plain English Disclosure 2019
- J.W.Cole Advisers, Inc. SEC Form ADV Part 2B - John H. Robinson Consumer Disclosure Brochure 2019
- J.W.Cole Advisers, Inc. Business Continuity Policy 2019
- J.W. Cole Advisers, Inc. Cybersecurity Platform
Flat-Fee Financial Planning
Flat-fee planning also available to prospective FPH clients. This compensation model is typically best suited for clients who are seeking a one-time comprehensive financial planning review or second opinion. The fee for this service is negotiated with each client in advance and is dependent upon the scope of work. Flat-fee planning is provided through Financial Planning Hawaii, Inc., a state of Hawaii Registered Investment Adviser.
FPH does NOT offer hourly planning as we believe this model puts the client's interests too much in conflict with the adviser's.
For more information regarding FPH's scope of services to flat-fee planning clients, please read the FPH Fee-Based Planning Client Agreement
Disclosure documents pertaining to Financial Planning Hawaii’s fee-only service model are provided below:
- FPH Fee-Only Financial Planning Client Services Agreement
- Financial Planning Hawaii SEC Form ADV 2A & 2B - Consumer Brochure (March 2020)
- FPH Registered Investment Advisor Code of Ethics
- FPH Registered Investment Advisor Business Continuity Plan
- FPH Registered Investment Advisor Consumer Privacy Notification
Commission-Based Brokerage and Insurance Products
Despite a broad shift toward fee-only planning and asset-based management over the past two decades, FPH believes traditional commission-based brokerage accounts and insurance products still have a place and may represent an optimal choice for certain investor circumstances and interests. Brokerage accounts are available to FPH clients through J.W. Cole Financial, Inc., a FINRA member Broker-Dealer, with National Financial Services, LLC (a Fidelity Investments Company) serving as the custodian for all client assets.
Through J.W. Cole Financial, FPH offers clients access to a full range of investment and products including stocks, bonds, FDIC insured certificates of deposit, mutual funds, annuities, and life, disability, and long term care insurance products. With respect to commission-based brokerage accounts, FPH strives to explain as clearly and transparently as possible the fees, commissions, and expenses associated with each transaction and how we are compensated for such trades. Qualitative guidance pertaining to the non-investment aspects of each client’s financial position is considered incidental to the client relationship and is included at no additional charge. Brokerage clients are also given access to eMoney.
For more on Financial Planning Hawaii’s philosophy regarding how investors should pay for financial planning guidance and investment management services, we offer the following two publications:
What's The Best Fit for You? FPH’S introductory guide to helping clients select the financial advisory compensation models that best fit their needs and objectives.
“Who’s the Fairest of Them All? – A Comparative Analysis of Financial Advisor Compensation Models” (John Robinson’s May 2007 Journal of Financial Planning paper.)