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Concierge wealth management firm Flat Fee CIO is
something of an industry outlier. In fact, in one very
important respect, it’s a 180-degree departure from the
norm. Through the experienced application of efficient
financial services technology, Flat Fee CIO, your Family
Chief Investment Officer, offers a fixed-dollar annual
retainer with the potential to deliver significant savings
over the old asset-based percentage fee structure that
has existed unchanged for close to 30 years.
“Investment styles go in and out of favor,” says Don
Rudolph, principal of Flat Fee CIO and 25-year veteran
of the high-net-worth investing arena. “But advancing
technology has fundamentally transformed the industry
status quo with an expanded suite of services and lower
standard fee thresholds.”
Flat Fee CIO, founded by Rudolph, is a boutique wealth
management offering of Founders Financial Alliance, LLC
and, provides affluent investors what they need and want
most: deep expertise, an expanded suite of services, and
proactive account management for a single transparent
fixed-dollar annual advisory fee. What makes the firm
notably different is its commitment to the fiduciary
standard of care that includes implementing fixed-fee
alternatives within customized wealth solutions.
“At Flat Fee CIO, our commitment as fiduciaries does not end with ensuring our wealth structuring and investment
recommendations are always in the client’s best interest,” Rudolph says. “It also includes maintaining a keen eye on the client’s
bottom line in seeking to minimize ongoing costs and help clients keep more of what they earn. Unlike percentage-based fees,
with our fixed fee structure, our clients—not the markets—determine when we earn a raise.”
In the course of Flat Fee CIO’s comprehensive fiduciary review, it may be determined that simply replacing the old asset-based
percentage fee with our lower fixed annual fee on the current investments can save tens of thousands of dollars each year. Other
details in the review may reveal further opportunities to reduce or eliminate additional underlying product costs that can increase
the total ongoing annual investment management expense.
Over the past 30 years, technology has transformed affluent wealth management services. Yet affluent fee structures have
changed little, even in recent years as the pace of technological change has accelerated. As it does for virtually every industry
it touches, technology has lowered operational and administrative costs through added efficiencies while expanding choice
Today, advisory fee choices in affluent wealth services have reached a tipping point with fixed fee options at lower competitive
thresholds in the marketplace. Flat Fee CIO’s fixed-dollar fee is not simply a capping of prospective client’s current level of fees
under their old percentage-based structure; it is a fixed dollar level that reflects the new operational efficiencies that technology
has delivered for professional investment management. Under our fixed fee arrangement, clients can consolidate more of their
investments under our fixed dollar fee in an effort to further reduce their average annual costs.
“Even the most experienced affluent investors may not be fully aware of the total ongoing costs of their advisory services,”
Rudolph says. “For the past 30 years, our industry has adhered to a compensation model that grows directly with the growth of
underlying assets. We believe the time has come for clients to embrace a fee model based on the complexity of their ongoing
needs so they can capture the significant savings afforded by a more predictable and transparent fixed-dollar approach.”
In fact, the traditional asset-based percentage advisor’s fee may be just the tip of the iceberg of an investors’ total annual
recurrent costs. Beneath the surface, there can be multiple layers of product and platform fees.
“Under the traditional percentage fee, as account values grow larger over time, the dollar amount of the fees both above and
below the surface rise directly with any increase in the value of the account,” Rudolph says. “This can take a larger and larger
bite out of clients’ net spendable income and dramatically impact financial outcomes. Our fee structure is a function of a client’s
financial complexity, not asset growth. It’s straightforward, transparent, and easier to understand.”
For example, the traditional 1% annual advisor fee on a $2 million portfolio is $20,000 per year. If an investor receives a 4%
annual income stream ($80,000 per year) from that same portfolio, the annual advisor fee alone represents 25% of gross
spendable income. After federal and state taxes, the 1% annual advisor fee may approach 30% or more of net spendable income.
“When they view it from that perspective, clients begin to understand why fee considerations are as crucial as determining
portfolio risk and investment selection,” Rudolph says. “The potential savings with our fixed annual fee goes directly to our clients
bottom line and helps them retain more of their valuable retirement income.”
Flat Fee CIO’s suite of services includes simplifying the reporting of complex holdings across multiple client accounts by making
them accessible through a single secure portal backed by Fidelity Investments. Rudolph and his team build tax-aware portfolios
supported by institutional research and harness a variety of portfolio and fixed income analytical tools on the clients’ behalf. They
also partner with clients’ existing legal, accounting, and family office professionals depending on their multi-disciplinary needs.
Although Flat Fee CIO’s fee structure alone can enhance the client’s bottom line, Rudolph remains committed to delivering
exceptional value in the form of personalized, concierge-level service.
“We apply efficient financial technology for tangible and measurable savings, but our clients will never shake a robot hand,”
Rudolph says. “We’re a full-service boutique, not a discount or bare-bones self-service operation. We are experienced wealth
advisors who are personally invested in our clients’ financial success.”
“In light of new lower fee thresholds made available by advancements in wealth
management technology, we would ask prospective clients for the opportunity
to compare and evaluate whether their existing services remain priced for
luxury wealth or a more practical affluence.” – Don Rudolph
Any references to or calculations of account values, fee amounts or returns are purely hypothetical and should not be
expected for all clients.
Investment advice offered through Founders Financial Alliance, LLC, a registered investment advisor.
This content was provided by Financial Service Directory. Kiplinger is not affiliated with and does not endorse the company or products mentioned above.