Join a Fee-Only Financial Firm

Here at Marotta Wealth Management, we foster a no-competition work environment. Each of us has clear job descriptions. We are paid a clear and consistent salary. We have clear and measurable raise milestones. The advice, recommendations, planning, investment selections, or any other services provided to clients is irrelevant to the matter of compensation.

From this, each employee is given the chance to succeed on his or her own, and each co-worker the chance to celebrate those successes without reservation.

& Avoid “Eat-What-You-Kill” Employers

We do not recommend taking a job as a commission-based salesmen at any so-called advisory firm.

In the commission-based world of financial services, employees are often only given a small base salary. Then, the bulk of their compensation comes from commission-based activity. This method of compensation is often referred to as the “eat-what-you-kill” model of employee compensation because your take home pay is dependent on how much you can convince your customers to spend.

There are at least sixteen problems with the Eat-What-You-Kill Model. We strongly encourage Virginia Tech graduates to avoid employment at such custodians.

Join an Ensemble Team

At Marotta Wealth Management, we work to fulfill our fiduciary responsibility by dividing areas of expertise into specialties and allowing team members to expand their knowledge and competence as a specialist in that area.

This means that new hires are immediately able to lean on the wisdom of our team and thrive in financial planning for their clients. This collaboration between advisors, specialists, and traders provides different perspectives on financial planning which enhances the service we offer to clients.

It would be difficult for any one advisor to be an expert in every area of comprehensive wealth management. For this reason, studies suggest that multi-advisor firms both do better as a firm and do better for their clients. They can perform the work better, faster, and smarter by each specializing and then collaborating with other team members.

For more on this, read our article “Q&A: Will You Be the Only Financial Planner Working with Me?”

& Avoid the Silo Approach

At some commission-based firms a single advisor receives the commissions from the products and services which they sell you. As a result even if you are at a big firm, no one else at the firm has much incentive to do work on your client’s behalf.

This silo approach leaves clients dependent on the expertise of a single salesmen to provide them with wealth management services, many of which cannot be reduced to a commission-based transaction.

Become a Fiduciary First

As fee-only financial planners, we receive no other form of compensation other than the fee our clients pay.

We believe this policy helps mitigate the conflict of interests inherent when a firm receives compensation based on the sale of specific securities or investment products. We do not receive any payments or commissions from fund or insurance companies. Our only compensation is from the clients we serve. As such we have every incentive to keep your fund and brokerage costs as low as possible in order to keep the returns you receive as high as possible.

& Avoid Inherent Conflicts of Interest

Some firms try to claim that while they are fee-based, they have designed their practice to avoid conflict of interests. However, you can’t design a practice to avoid conflicts of interest when you stand to gain from the financial advice you give to clients.

No matter how hard you claim to ignore those incentives, the fact that there are incentives means you have a conflict of interest. Refraining from acting on the conflict is not the same as avoiding the conflict. You can’t avoid it, you can only disclose it and not act on it.

As former broker Matt Illian describes in “Are Financial Advisors Hazardous to Your Wealth?,” “As you can imagine, it’s very challenging to remember the Golden Rule when both your paycheck and your self-worth is at stake.”

Offer Free Advice to Your Close Family

We are a fee-only financial planning firm. That means that our only compensation comes from a straight forward fee from the clients we serve. We do not receive any payments or commissions from any other source.

This sole compensation of our straight forward fee is what we waive for close family of employees as a part of their employee benefit.

Since there are many so-called advisors who will try to falsely claim their services are free, it is worth taking another moment to clarify: Our services are offered free to family of clients because we receive no compensation for the services we do for those family members.

We offer this employee benefit so that when employees are asked by their close loved ones, “You’re a financial planner. Can you help me navigate my employer benefits?,” you are able to be backed by the full support of the ensemble team. And when you are wondering, “Should I convert my profit-sharing to Roth now?,” you’re able to utilize the wisdom of our specialists to achieve your own financial goals.

& Don’t Peddle Products to Them

Employees of commission-based brokerage firms gain their revenue from the commissions that they personally generate. In this way, most so-called advisors at brokerage firms generate their own salary by marketing their products to their own social groups.

An employer can hire nearly anyone while taking on very little risk. They pay a minimal salary while letting the employees’ ability to sell product determine their true compensation. More product sold is more income earned. Less product sold is less income earned.

Early on, most commission-based brokers must find their initial business within their social network, preying upon their friends and family.

We don’t recommend working at such a firm.

Offer Comprehensive Financial Planning

Financial planning is a collaborative process that helps maximize a client’s potential for meeting life goals through financial advice that integrates relevant elements of the client’s personal and financial circumstances.

We strive to practice comprehensive financial planning. We like to say that this means that we strive to do whatever the client would do if they had our time and expertise.

Because we strive to offer comprehensive financial planning, the generic advice that a lite firm might dole out is easy compared to the work that we do.

& Don’t Stop at Investment Management

We like to say that clients deserve more than just investment management and a retirement plan.

Investment management is all about the investments. Financial planning is about the clients and their goals.

Lite financial planning is generic analysis applied to one client. Comprehensive financial planning is built bit-by-bit as specific analysis for the client from the start.

We strive to offer comprehensive financial planning.

We are able to write extensively on how to practice your own lite financial planning and give that advice away for free because it does not compete with the level of service we provide.