What is fee-only planning?

Fee-only planning is exactly what it sounds like. Lochinvar receives no commission on any investment product suggested to, or bought for a client. We believe that any investment advisor who is paid primarily by commissions has an inherent conflict of interest. Anyone who is paid for selling something is naturally going to try to sell as much of it as possible. But is this in his client's best interest? Probably not.

Most people know that full-service stockbrokers charge large commissions for their services. That's why discount brokers are so popular these days. Yet many individuals persist in dealing with traditional firms, often because of a relationship built over many years. However, investors should pay attention to how much this relationship may cost. If the investor is truly a good customer, it should be possible to get a better commission rate with his firm.

What's wrong with commissions?

The danger with commission-based advisors is that they will switch you from one investment to another, both to improve your performance and to increase their commission stream. Be aware that you are investing less than 100% of your money in these cases. How much more money do you think you would have after 20 years if you were investing 100% of your cash, and not, say, 95%? Also remember that commissions are not a one-time fee! You pay every time you transfer money from one load fund to another.

How do fee-only plans work?

Fee-only planners like Lochinvar charge only an annual fee based upon the services provided. Investment management typically costs 1% per year. Unless you hold onto your load funds for 5 years or more, this alone will save you money.

It's also a good idea to have your financial planner monitoring the progress of your investments, and periodically suggesting changes in strategy to help you achieve your investment goals. Lochinvar can help you formulate your investment strategy for a prearranged annual fee.

Why Lochinvar?

All fee-only planners are not created equal. Study the qualifications and the work experience of any prospective advisor. You should also ascertain how much attention they might devote to your account. Today many advisors employ packaged software that uses colorful graphs and tables to indicate how your investments are performing, how their performance compares to this index, that other fund, etc. But, is your advisor thinking about your situation?

At Lochinvar, we use no planning software and our investment approach is never canned. We know that each of our clients is different. Your accounts will receive our complete attention. Contact us and find out why Lochinvar is different.