Geier Asset Management is a fee-only financial planner serving Sarasota, Florida. We take our fiduciary duty seriously—putting our client’s interest first at all times. We make sure our investment advice is reasonable, objective, and suitable for the client’s needs, goals, and circumstances.
To speak with one of our Sarasota area fee-only financial advisors, call us today.
When it comes to investments, Geier Asset Management has formed a relationship with Fidelity Investments, one of the largest and widely respected providers of investment products. All of our investment offerings from Fidelity are obtained at minimal transaction costs to the client. There are no commissions involved. Any transaction costs are charged by the investment product fund company—Geier Asset Management does not receive any compensation from any transaction fees or commissions.
All of the investments for our Sarasota area clients are offered via fee-only. We do not accept performance fees. We do not accept commissions. Our fees are charged as a percentage of the total portfolio.
At Geier Asset Management, we take our fiduciary duty seriously. We put our client’s interest first at all times. We make sure our investment advice is reasonable, objective, and suitable for the client’s needs, goals, and circumstances. We are loyal to our clients and deal with them fairly. Our “client-first” culture has enabled us to form many long lasting and trusting relationships over the many years.
In order to understand the meaning of the term “fee-only” as it pertains to the investment industry, you need to look at some of the history of how investment products were sold in the past. Before the passage of the Investment Advisors Act of 1940, most stocks, bonds, and other investment products were sold by stock “brokers.” These people acted as middlemen between the person who would like to sell the stock and the one who would like to buy. The broker would collect a commission on the sales price of the transaction. For example, if someone bought 100 shares of XYZ Company for a total of $10,000, the broker would collect a commission of say, 5%, or $500. In an isolated transaction such as this, everyone was happy. The seller was able to sell the security at a fair price, the buyer was able to purchase it also at a reasonable price, and the broker was compensated for his work.
However, built into this system was the incentive for the broker to increase the amount of transactions placed every year. The more transactions he represented, the more he would earn in commissions. Because the broker was an employee of the brokerage company, his loyalties were with his employer. The more the employer transactions completed, the larger the broker’s bonus would be. So, many brokers began to find various reasons why their clients should buy and sell many different equities throughout the year, as opposed to holding them for longer terms. Many clients were unsophisticated and did not understand what was happening. Unscrupulous brokers made fortunes selling questionable securities to the public.
After the stock market crash of 1929 and the years after, congress investigated the many corrupt practices of the worst abusers, and put into law the Investment Advisors Act of 1940. This Act formed a new and different kind of investment professional, the Investment Advisor. The Act made it a legal requirement that advisors be registered with the Securities and Exchange Commission while abiding to specific set of rules.
The most stringent of the rules is that an Investment Advisor has a fiduciary duty to his or her client. This means the client’s interest must be put first. What developed from this is the practice of advisors to charge fees on the value of a client’s portfolio, rather than earn commissions on individual transactions as a broker does.
Advisor compensation through the use of a total fee puts the interests of the client and the advisor in alignment. As the portfolio increases in value, both the client and advisor benefit. Also, if the portfolio value goes down, the advisor makes less money. This is in stark contrast to a broker who can make more money based on a greater number of transactions executed. Brokers are, in effect, compensated for selling. Advisors are compensated for giving sound advice.
Make sure you understand the difference between a stock broker and investment advisor. If you don’t already know, ask your investment provider how they are registered and who they represent. Be assertive in questioning what costs will be involved throughout the course of your relationship.
A small number of clients have requested that we provide insurance products that are only available with commission compensation. In these cases, Geier Asset Management does receive the normal commission, as the Geier representative is acting as an insurance agent. All commissions are disclosed to the client up front so that there is no conflict of interest involved. Because insurance is a small ancillary part of our revenue that is offered as part of our financial planning process, we have no incentive to “sell” insurance. It is available as a convenience for our clients.
As a fee-only financial planner, we also offer: