Our Fee-losophy
Our fee structure is governed by these principles:
- We will provide an entry-level minimum fee an E-6 could afford.
- 100% of our compensation will come directly from the client.
- Transparent, simple, and fair
To accomplish those things we calculate an annual fee based on the complexity of your financial situation. Our primary means of assessing complexity is to use the main pieces of your net worth as a proxy. Real estate, investment accounts, mortgages, student loans, etc. Once we understand that net worth, we make a few adjustments to it:
- We discount up to $100K from it for a retirement plan balance
- We discount up to $100K from it for equity in your primary residence
- We add back in any student debt in excess of $100K
Once we have your modified net worth (MNW) figured out, we assess your annual fee as follows:
| Modified Net Worth (MNW) | First Year Planning Fee |
|---|---|
| Up to $360K | $3600 |
| $360K - $500K | $3600 + [1.0% x (MNW - $360K)] |
| $500K - $1.0MM | $5000 + [0.75% x (MNW - $500K)] |
| $1.0MM - $2.0MM | $8750 + [0.50% x (MNW - $1.0MM)] |
| > $2.0MM | $13,750 + [0.25% x (MNW - $2.0MM)] |
The MNW formula determines what your maximum annual fee would be. Our next step is to review more specific elements of your financial situation, reducing the fee whenever we find less complexity than what your raw net worth suggests. Allowing us to manage your investment accounts helps to more efficiently implement your plan. Accordingly, we will discount your first-year fees by $600 or 10% (whichever is greater) if you elect to delegate investment management to RWS.
Your first-year fee will be a flat fee quoted to you in dollars. For your convenience, we will invoice you monthly in arrears for the annual amount. Clients who elect to remain clients for more than twelve months will see a 20% reduction in their annual fees in their second and third years, with a minimum annual fee of $2400. After three years of service, we will conduct a full review of your fees. RWS's maximum annual fee is $30K.