Choosing an advisor
How do you work out your total investment costs?
To understand investment costs, combine the advisory fee with fund expenses, trading charges, account fees and any borrowing costs that apply. A statement rarely presents every cost in one total. Request a written estimate for your accounts, then compare it with the advisory agreement, product disclosures and the firm's conflicts disclosures.
Which costs belong in the comparison?
Start with the services you receive and the assets covered by each charge. A percentage fee, a minimum annual fee and a separate planning charge can affect households differently even when the advertised rate is the same.
Ask whether the estimate includes charges paid to other providers. Our firm comparison guide uses the same questions for integrated firms and independent advisers.
Where can you find each category?
Use the documents in the table to build one worksheet. Record the amount, who receives it, whether it is ongoing and whether it is already included in another quoted charge.
| Cost category | Where to find it | Question to ask |
|---|---|---|
| Advisory and planning fees | Agreement, fee schedule and adviser brochure | What tiers, minimums and separately billed services apply? |
| Fund and investment expenses | Prospectus and product disclosures | Which costs are reflected inside the investment rather than debited separately? |
| Trading, account and borrowing costs | Brokerage, custody and lending schedules | Which charges vary with activity, balances or the products used? |
How do compensation and conflicts connect?
Ask whether recommendations affect compensation through commissions, revenue sharing, referral arrangements, affiliate products or the amount of assets managed. The SEC's adviser-compensation guidance discusses disclosure of financial conflicts.
An asset-based fee creates an incentive to attract and retain managed assets. That conflict can matter when considering a debt repayment, charitable gift or asset held outside the managed account; a fee-only description does not make the incentive disappear.
How should you compare fee-only and fee-based descriptions?
Treat either label as a starting point for questions about actual compensation. Ask what the firm, the individual professional and relevant affiliates receive, and which charges your account or investments bear separately.
Do not infer that a particular share class, account or firm is suitable from the label alone. Compare costs alongside the services, restrictions and conflicts disclosed for your proposed arrangement.
How can you build a useful annual-cost worksheet?
Build the worksheet account by account using the same values and time period. Ask the firm to explain estimates and prevent double-counting where one quoted charge includes another.
- Record each account's value and the services covered.
- Calculate the advisory charge using the applicable tiers and minimums.
- Add separately charged product, trading, account and borrowing costs.
- Ask the firm to reconcile overlaps and explain costs that vary.
What should you ask Aspirean?
Ask for the fee schedule, minimums, other costs and conflicts applicable to your proposed engagement. Aspirean's asset-based compensation is relevant to this comparison, just as compensation is relevant when assessing another adviser.
Use Aspirean's SEC adviser record and current filings with the agreement you are considering. If the review is part of a move, include the possible exit and transition costs described in our transfer guide.
What else should you know?
Is the advisory fee my total investment cost?
It may not be. Ask whether fund expenses, trading charges, account fees, borrowing costs or separately billed services apply in addition to the advisory fee.
Does fee-only mean there are no conflicts?
No. An asset-based fee creates an incentive to attract and retain managed assets. Review the actual compensation, services and conflicts described in the agreement and disclosures.
This piece is general education, not individual investment, tax or legal advice. Investing involves risk, including possible loss of principal. Decisions depend on your circumstances and the applicable agreements and law.
Meet with us
How can you discuss your next decision?
Bring the planning question this guide raises for your situation. A conversation can clarify what information is needed and whether Aspirean's services fit the work.
Book the twenty-minute call What a second opinion involves