If I work with Keatley Wealth Management, do you actually have possession of my money? How do I know my money is safe?

All client accounts are held at Fidelity Investments – Institutional Wealth Services, which provides custody and trading on behalf of Keatley Wealth Management and our clients. Fidelity is a leading provider of services to Registered Investment Advisors, such as Keatley Wealth Management. Clients receive monthly statements from Fidelity and quarterly statements from Keatley Wealth Management. Keatley Wealth Management does not have physical custody of any client funds. Ever.

Does this mean you work for Fidelity? Are you required to use Fidelity mutual funds and other products in investment portfolios?

No, Keatley Wealth Management is completely independent. We are under no obligation to use Fidelity mutual funds or investment products in client portfolios and are free to (and we do) choose the best alternatives to meet our clients' needs.

Do you have a minimum amount for investment management?

Yes, we like to see at least $750,000 of investable assets. Sometimes we work with clients who have less if they are adding to their investment portfolios and expect to achieve our minimum in in the near future. (For clients who invest less than $750,000, a minimum annual fee applies. Please see fee structure below.)

How much do you charge and how do you get paid?

Keatley Wealth Management is paid only by our clients and we do not receive commissions or payments from any third parties. This is what it means to be fee-only.

Investment management fees are deducted from client accounts quarterly. Our annual investment management fee is:

  • 1.0% on the first $1 million
  • .75% for the next $2 million
  • .5% on amounts over $3 million

The minimum portfolio value is generally set at $750,000. In the event that we accept an investment portfolio valued at less than $750,000, a minimum annual fee of $7,500 (1,850 per quarter) is charged.

We do not charge separately for financial planning services. An initial comprehensive financial plan and ongoing financial planning is included in the investment fee paid by our clients.

What is the difference between "Fee-Only" and "Fee-Based"?

When advisors describe themselves as fee-based, it means that some of their compensation comes directly from their clients as fees, but not all. They still sell financial products to their clients for commission or accept referral fees to refer their clients to other professionals.

Many Registered Investment Advisors are also registered as a broker or Registered Representative with a broker-dealer. These dually-registered advisors are held to a fiduciary standard while providing financial planning services, but once they switch hats to being an employee of their broker-dealer, they are only held to the much lower "sales suitability" standard of conduct.

A typical scenario sees the dually-registered advisor prepare a financial plan for a client as a Registered Investment Advisor fiduciary, but when it comes to discussing which investments to use, the advisor becomes a salesperson for their securities employer. Broker-dealers must disclose that they and their salespeople are not necessarily acting in your best interest. In fact, the SEC requires them to add the following disclosure to client agreements:

"Your account is a brokerage account and not an advisory account. Our interests may not always be the same as yours. Please ask us questions to make sure you understand your rights and our obligations to you including the extent of our obligations to disclose conflicts of interest and to act in your best interest. We are paid both by you and, sometimes by people who compensate us based on what you buy. Therefore, our profits and our salespersons' compensation may vary by product and over time."

In fact, when advisors are functioning as salespeople, they are required to act in the best interest of their employer, not yours.

Three Ways to Distinguish Fee-Based from True Fee-Only Advisors:

  1. If the client agreement has the SEC disclaimer language above, you are not working with a fee-only advisor.
  2. If the advisor's business card or web site has the term, "securities offered by XYZ, a broker-dealer", you are not working with a fee-only advisor
  3. If your advisor is a member of the National Association of Personal Financial Planners (NAPFA), then you can rest assured that your advisor is a true fee-only advisor who is required to annually sign a fiduciary oath as a condition of membership.

An advisor who has a financial stake in the course of action that he recommends to his clients faces inherent conflicts of interest. His advice cannot be considered objective and unbiased. This is true even if the advisor believes that he is helping his clients.

Why is it important to work with a NAPFA-Registered Financial Advisor?

Being a NAPFA-Registered Financial advisor is the "Gold Standard" of financial planning. In order to achieve this status, an advisor must be a CFP® certificant, have her written planning work reviewed and critiqued by other NAPFA advisors, and keep up with the evolving financial landscape with the most rigorous continuing education requirement in the industry. Finally, NAPFA-registered advisors must sign the NAPFA fiduciary oath every year.