Fees

FIXED FEE SCHEDULE:

For married couple/domestic partners/business:
$1,900 startup fee
payable after development and acceptance of investment plan, followed by $2,500/year management fee payable in quarterly installments, in arrears.

For individual:
$1,400 startup fee
payable after development and acceptance of investment plan, followed by $2,000/year payable in quarterly installments, in arrears.

You will receive an investment plan plus an ongoing relationship where the firm assists with implementation of your plan. Your customized investment policy statement will include a recommended set of investments and action steps coordinated across your various investment accounts.

You are requested (but not required) to engage the firm with the intent to maintain our relationship for at least one year after the startup fee is paid.

Quarterly management fees would begin accruing only after the startup phase is completed. Invoices for quarterly fees are sent out at the end of each calendar quarter, prorated appropriately where the portfolio management services did not include the entire previous quarter. If the contract ends, clients are invoiced at the time of termination rather than at the end of that calendar quarter.

HOURLY FEES
In most cases I recommend that clients choose the appropriate fixed fee option as that generally allows for more effective service as well as a lower total cost to the client. However for hourly rate engagements that might be appropriate in some situations, my fees are $200/hour.

All fees are negotiable. For client relationships that don’t fall cleanly within the categories described on this page, we will negotiate a fixed fee appropriate for the particular situation. In certain cases, I may modify the fees or provide some pro bono services depending upon client circumstances. If your situation is particularly complex or travel is required, the fixed fees may be somewhat higher than the standard rates listed on this page.

Introductory 60-minute client meetings are provided at no charge and with no obligation. Should we later agree to formalize an advisory relationship, the applicable fee schedule is described on this page. Because recommendations often reduce investor costs (expense ratios, taxes, transaction fees, commissions, etc.), a commensurate improvement in after-tax returns is likely over the long term and many clients discover the cost savings outweigh the fees paid to Pragmatic Portfolios, LLC.

In addition to Pragmatic Portfolios, LLC's advisory fees, clients will also incur management fees and other expenses charged by mutual funds and exchange-traded funds that may be bought for client portfolios. Custodians may also charge fees and commissions to clients.

Pragmatic Portfolios, LLC designed its unique flat fee-only pricing model in order to best serve clients:

  • To help ensure my loyalties are directly aligned with client situations, goals, needs, and objectives. By charging only flat fees, serving the best interests of clients is my only goal. There is no incentive to recommend changing form or custody of assets, other than where it would best serve client interests.
  • I'm not forced or pressured to recommend only a specific provider’s investment options. Instead I'm free to recommend only investments that are in the best interests of clients.
  • Another benefit of this fee structure is I'm ready, willing, and able to provide advice on client accounts not directly under the firm's management.
  • This pricing model allows us to steer clear of complicated (and expensive!) investment vehicles and instead focus on the those that are likely to be of more benefit to investors over the long haul.

Please see the Frequently Asked Questions page for further information on the fee structure, or contact me if you have any questions.

FEE COMPARISON

These fees compare very favorably to those of most other advisers. For example, many investment advisers and brokers have a portfolio management fee structure based on a percentage of assets under management (“AUM”). AUM-based fees don’t make sense to me, as the level of advisory effort does not change proportionately with the level of AUM. Often times the level of advisory effort is similar whether your AUM are $500,000 or $5,000,000, so fees do not vary proportionately with AUM. Therefore when your investments grow, the fees to Pragmatic Portfolios as a percentage of AUM shrink dramatically. Please see the following table for examples comparing my low portfolio management fees to those of an adviser charging 1% of AUM annually:

Investor Type Assets Under Management ("AUM") Annual Portfolio Management Fee of Pragmatic Portfolios, LLC Annual Portfolio Management Fee of Another Adviser That Charges 1% of AUM
Single $100,000 $2,000 (2.00%) $1,000 (1.00%)
Single $300,000 $2,000 (0.67%) $3,000 (1.00%)
Single $1,000,000 $2,000 (0.20%) $10,000 (1.00%)
Single $3,000,000 $2,000 (0.07%) $30,000 (1.00%)
Single $5,000,000 $2,000 (0.04%) $50,000 (1.00%)
Couple $100,000 $2,500 (2.50%) $1,000 (1.00%)
Couple/Business $300,000 $2,500 (0.83%) $3,000 (1.00%)
Couple/Business $1,000,000 $2,500 (0.25%) $10,000 (1.00%)
Couple/Business $3,000,000 $2,500 (0.08%) $30,000 (1.00%)
Couple/Business $5,000,000 $2,500 (0.05%) $50,000 (1.00%)