How a financial advisor is paid can depend on the service, account, capacity, and agreement involved. Cary Stamp & Co.’s original compensation discussion described percentage-of-investments compensation, possible planning fees for extensive discovery, and quoted charges for special engagements. Those statements were published in 2020 and should be read as historical context, not as a current fee schedule.
Before working with any financial professional, ask how the applicable service is paid for, what costs may apply, and which written agreements and disclosures describe the relationship.
Historical context for this article
This page was originally published on November 5, 2020 and last updated on January 7, 2022. The compensation discussion below reflects the information and framing of that earlier article. It is educational historical context, not a current fee schedule, offer, or statement that every Cary Stamp & Co. service is compensated in the same way.
What the original article described
The original article described investment-management compensation as a percentage of investments held for clients. It also said that an engagement requiring extensive discovery and planning could involve a separate planning fee, and that special assignments or engagements could have a quoted charge. The article did not publish a current numerical rate schedule, fee breakpoints, account minimums, billing frequency, insurance compensation, or the complete costs that may apply to a particular account.
Current compensation depends on the service, account, capacity, applicable agreement, and disclosures provided for the relationship. Readers should request those details directly and review the written materials that apply to their circumstances.
The absence of a number on this page is intentional. A historical description cannot substitute for the current agreement, disclosure documents, or cost explanation that applies to a particular relationship. Readers should not infer a current rate, minimum, or total cost from the older wording.
How financial advisor compensation can be structured
Depending on the service, an advisor or firm may receive an advisory fee, planning charge, commission, or transaction-related payment. Products and accounts may also carry separate expenses. These are not necessarily the same as compensation paid to an advisor or firm, so ask how each cost is charged and who receives it.
These categories are general educational descriptions. The applicable arrangement should be confirmed in the firm’s current disclosures and the written agreement for the relationship.
Asset-based advisory fees
An asset-based advisory fee is generally tied to the value of assets covered by an advisory relationship. The amount and billing method can vary by program, service, account, and agreement. A percentage description alone does not establish a current rate, a minimum, or the total cost of an engagement.
Planning fees and special engagements
Some planning work may be priced separately from investment management, particularly when the scope includes extensive discovery or a defined special assignment. Ask what the planning fee covers, when it is due, what deliverables are included, and whether other account or product costs may apply.
Questions to ask before working with an advisor
Before engaging an advisor, consider asking:
- Which person or entity provides each service, and in what capacity?
- How is the applicable account or service charged?
- Which costs are paid directly, deducted from an account, or included in a product expense?
- Could planning, consulting, insurance, brokerage, or special-engagement charges be separate?
- What services are included, and what is outside the stated scope?
- Which written agreement, Form CRS, Form ADV, or other disclosure explains the arrangement?
- How could the cost change if the service, account value, product, or scope changes?
The U.S. Securities and Exchange Commission’s Investor.gov provides additional questions for evaluating an investment professional, and FINRA explains common fees and commissions. These resources can help a reader prepare for a direct discussion about costs and services.
Read the Investor.gov questions for hiring an investment professional and read FINRA’s overview of fees and commissions.
How to compare compensation explanations
A useful explanation should identify the service being provided, the person or entity providing it, the way the charge is calculated, and when the charge is collected. It should also identify costs that may come from the account, product, custodian, broker-dealer, or another service provider.
Comparing two percentages alone may not compare two equivalent services. Scope, monitoring, planning work, transaction activity, product expenses, account features, and the responsibilities of each provider can differ. Ask what is included and what is not before deciding whether an arrangement fits your needs.
When an advisor refers to a particular program or product, ask for the current disclosure that explains the relevant fees, conflicts, and other costs. If the answer is unclear, request a plain-language explanation and take time to review it before making a decision.
It can also help to separate the cost of advice from the expenses of the investments or account. A service may have more than one cost category, and a lower stated percentage does not necessarily mean a lower total cost if the services, products, or account features differ. The right comparison is the one that accounts for the actual scope and circumstances.
Keep a copy of the explanation and ask how changes to the relationship will be communicated. If the proposed service changes, the account value changes, or a product is replaced, ask whether the applicable fee, expense, or disclosure also changes.
Service and provider boundaries
Cary Stamp & Co. describes financial planning and investment-management guidance as part of its services. Securities and advisory services are offered through Commonwealth Financial Network. Fixed insurance products and services are separate from and not offered through Commonwealth.
Cary Stamp & Co. and Commonwealth do not provide tax or legal advice. The firm describes coordination with qualified outside professionals for tax and estate matters. The services, capacity, and availability that apply to a particular person depend on the engagement and the associated advisor’s registrations or licenses in the relevant jurisdiction.
Investment risk and disclosure
Understanding compensation does not make an investment outcome certain. Investing involves risk, including possible loss of principal. Asset allocation, diversification, and rebalancing do not assure a profit or protect against loss. This article is educational and is not an offer or individualized investment, tax, or legal advice. Review the applicable disclosures and discuss your circumstances with qualified professionals before acting.
Why written disclosures matter
A conversation can help explain a proposed relationship, but the current written agreement and disclosures should control the details of the engagement. They can identify the services covered, the applicable capacity, the calculation and timing of fees, account or product costs, and circumstances that may change the amount paid.
For securities and advisory services, the relevant Commonwealth materials may describe programs and risks at the provider level. Those materials do not automatically establish one universal Cary Stamp & Co. price or one arrangement for every client. Ask which documents apply to the proposed service and how the firm will explain any differences.
For tax, estate, insurance, or business decisions, ask which professional is responsible for the applicable advice or product and how the financial planning relationship coordinates with that professional. Confirm the scope before sharing sensitive information or acting on a recommendation.
Frequently asked questions about advisor compensation
How are financial advisors paid?
Compensation can vary by service, account, capacity, and agreement. It may include an advisory fee, a planning or consulting charge, a commission, or product and account expenses. Ask for the applicable written explanation rather than relying on a general label.
Can planning fees be separate from investment-management fees?
They can be, depending on the engagement and the scope of work. Ask whether planning is included, how the planning fee is calculated, what it covers, when it is due, and whether it is separate from other account or product costs.
What should I ask about costs before working with an advisor?
Ask who provides each service, how the account is charged, which costs are paid directly or deducted, what is included, what other expenses may apply, and which current agreement and disclosures describe the relationship.
Conclusion
The most useful compensation explanation is specific to the service and relationship being considered. The original Cary Stamp & Co. article provides historical context, while current costs and responsibilities should be confirmed through the applicable agreement and disclosures.
Readers who want to understand how Cary Stamp & Co. approaches planning and investment management can use the established Get Started path to begin the appropriate conversation. The next step depends on the person’s circumstances, needs, and the services being considered.
