In this episode, Justin and Jared discuss the issues with assets under management (AUM) fees. We review the conflicts of interest, the balance sheet issues it creates, and what alternatives are available. We especially focus on one issue it incentivizes: clients only handing over a small portion of their assets to their advisor. This results in the majority of the client’s assets not being integrated into their plan and balance sheet long-term.

It makes sense for clients to self-manage some of their assets when their advisor may charge tens of thousands of dollars more each year to manage everything. But that shows the absurdity of the arrangement. If you’re already paying $15,000+ for financial advice (if you have $1M with an investment firm, you likely are), it makes far more sense to be in a flat fee structure that works for both parties and allows fiduciary advice to flow to all of your assets and each area of your financial life.

Show Notes

Article on the convoluted process of hiring an advisor

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