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How Are You Compensated?
Compensation for Financial Service
When you buy or sell stocks, bonds and other investment products, there are costs associated with doing so. These costs can vary based on the type of account you have, the investment services you're signed up for and the types of products in which you're investing, but some sort of fee or commission is almost certainly guaranteed.
At Team Hines Remer, we believe that transparency and trust are the cornerstones of every client relationship. That’s why we operate as a Hybrid (see below) financial planning firm—an approach that blends the best aspects of different compensation models to better serve you. Here’s what that means and why it works to your benefit.
Understanding Common Costs You Might See In the Industry
In the financial services industry, costs can come in a few different ways. Before we take a look at how a firm may position itself in regards to what cost structure they offer clients, lets take a look at the most common types of costs you might come accross.
Costs generally fall into three buckets:
Transaction costs - These are costs associated with buying and selling securities, which you're charged when you make a transaction. Transaction fees include:
- Commissions, which are charged to compensate an investment professional for buying and selling stocks and other securities.
- Markups or spreads, when an investment professional sells you securities that the firm has in its inventory.
- Sales loads charged when you purchase or sell mutual funds. Learn more about mutual fund sales loads.
- Surrender charges when you make an early withdrawal from a variable annuity.
- Fees - Also called client fees, these may come in the form of a fee charged for advice or portfolio management. These costs can vary depending on the type of service provided. Another type of fee could be either a flat fee for a financial plan or even a recurring fee for ongoing financial planning services.
An advisory fee may also be charged based on the size of your portfolio, referred to as an assets-under-management or asset-based fee. This is one of the more commen fees within the industry. These fees are generally assessed regardless of whether you buy or sell securities in the portfolio. - Ongoing Expenses - These are costs that you incur regularly, such as annual operating expenses, fees associated with operating and administrating your 401(k) account and other miscellaneous fees.
Mutual funds and exchange-traded funds have annual operating expenses to cover the professional management and marketing of the funds. And they may charge different amounts to different share classes. Investors can use FINRA’s Fund Analyzer to analyze and compare the cost of owning different funds.
Zero Commissions ≠ Zero Fees
Some brokerage firms—typically online or so-called “discount” brokerage firms—offer free trades or “zero-commission trading.” Similar to doorbuster sales and other marketing strategies, free trading is a way to attract customers, but free trading does not mean free investing.
Brokerage firms offering free trading often level charges and make money in other ways, such as through interest income from margin loans, robo-advisory service fees, commissions on options or other types of securities and more.
Transaction-Only Firms
Firms that do not offer fee-based services such as flat fee financial planning or advisory services. The only cost structures these firms offer are transaction based.
Hybrid Firms
Firms that offer both transaction based services as well as fee-based services. Sometimes referred to as full-service firms.
Fee-Only Firms
Firms that do not offer transaction-based services such as A-Share mutual funds or brokerage accounts without an advisory relationship. The only cost structures these firms offer are fee-based.
Now Let's Take A Closer Look At How Team Hines Remer Gets Compensated in our Hybrid Structure
Percentage of Assets Under Management (AUM) Fees
This model is compensation for managing investment accounts.
In this model, clients pay a fee based on a percentage of the assets the advisor manages on their behalf. We typically charge an advisor fee annually on the total portfolio value. This structure aligns the advisor’s compensation with the client’s investment performance. In a typical AUM model there can an advisor fee (for the advisor), a manager fee (if we hire a professional asset manager), and a program fee (for the platform we use to facilitate our advisory accounts). These fees are deducted directly from the accounts.
Flat Fees
Clients pay a predetermined, fixed amount for specific services, such as a financial plan. Flat fees provide transparency and allow clients to know exactly what they’re paying upfront.
We typically utilize this structure for our financial plans. Take a look at our services page for more information on financial plan packages. While we typically charge a flat fee for our plan packages, we include them for no additional cost to client whom we manage more than $500,000 in an AUM structure.
Hourly Fees
At Team Hines Remer, we aim to provide financial planning services that are tailored to every client's specific needs. While we primarily operate within asset-based (AUM) or flat fee structures, certain specialized services require flexibility due to their unique and highly variable nature. For these, we use an hourly fee structure. Our current hourly rate is $150 per hour (subject to change), ensuring transparency and fairness in how we bill for time-intensive, customized services.
Some examples of services that require an hourly rate are personal tax planning and custom consulting work.
Using our hourly rate ensures that you only pay for the time and expertise required to address your specific needs. This flexibility allows us to uphold our high standards of care and precision while addressing unique financial situations in the most effective way possible.
Commissions
While Team Hines Remer primarily operates as a fee-based firm, we occasionally use commission-based payments in specific situations. This structure is employed when certain essential products, like life insurance or annuities, are only available through commissions or when it provides cost savings for the client.
Even in these cases, our fiduciary commitment ensures we act in your best interest. With transparency at the forefront, we always disclose how we are compensated and why the recommendation aligns with your financial goals. Our commission-based services complement our fee-based approach, delivering flexibility while maintaining trust and integrity.
MoneyGuideProTM Zoomer Plan
The MoneyGuidePro Zoomer plan is a financial planning tool designed to engage younger clients or those new to financial planning.
Flat Fee: $600
MoneyGuideEliteTM Retirement Plan
The MoneyGuideElite retirement plan is a sophisticated financial planning tool designed for advanced retirement strategies.
Flat Fee: $2,499
MoneyGuideEliteTM Retirement & Estate Plan
The MoneyGuideElite Retirement & Estate Plan is an advanced financial planning tool that combines retirement strategies with estate planning.
Flat Fee: $3,499
Investment Management
Expert investment guidance to help you achieve your financial goals.
AUM Fee: 1.00% Advisor Fee*
*Can vary based on circumstance and be subject to program and manager fee
Tax Planning
Map where and how your money could flourish with Roth conversions, tax-efficient withdrawals, charitable giving, and more.
Hourly Fee: $150 Per Hour
Why Hybrid Firms Combine the Best of Both Worlds
At Team Hines Remer, our hybrid model aligns with our fiduciary obligation to act in your best interest. By having the flexibility to offer services within different cost structures, we mitigate conflicts of interest by ensuring we can always craft a solution that suits your unique needs.
We recognize that certain essential financial solutions, like some life insurance and annuity products, are only accessible through transaction-based products. As a hybrid firm, we're able to offer these options when they truly meet your needs—ensuring you benefit from a full-spectrum suite of financial tools.
Our Commitment to Fiduciary Standards
One of the common distinctions between financial advisors is whether they follow the "Suitability Standard" or the "Best Interest Standard."
- Advisors who follow the Suitability Standard are only required to recommend products that are "suitable" for your circumstances, even if better options exist.
- Fiduciaries, like Team Hines Remer, adhere to the Best Interest Standard—acting in the best interest of you, our client, by providing advice that is in line with your goals and objectives while fully disclosing any conflicts of interest.
In fact, maintaining a CERTIFIED FINANCIAL PLANNER™ (CFP®) means at all times, when providing Financial Advice to a Client, a CFP® professional must act as a fiduciary, and therefore, act in the best interests of the Client.—no exceptions.
The Team Hines Remer Difference
Our hybrid structure gives you access to the broadest range of financial products and services while ensuring that every recommendation is aligned with your goals, not our bottom line. With our CFP® designations and dedication to acting in your best interest, you can have confidence in our ability to provide comprehensive, conflict-free financial planning.
We’re here to guide you with integrity, transparency, and a commitment to delivering the right solutions for your unique financial journey.
Schedule a Free Consultation
If you believe you could benefit from working with a financial professional, let’s review yours goals to see if you’re a good match for our practice. We will help you find the lowest cost structure to meet your goals.
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Financial Planning & Consulting may be a complimentary no obligation service based on AUM provided to new and existing advisory clients. Financial Planning & Consulting Services is completed through a separate agreement from the Investment Management Services agreement. Please refer to firm's ADV Part 2A and the client's agreement for additional platform, strategist or any related fees that may apply. Our first priority is helping you take care of yourself and your family. We want to learn more about your personal situation, identify your dreams and goals, and understand your tolerance for risk. Long-term relationships that encourage open and honest communication have been the cornerstone of my foundation of success.