2595 East Perrin Avenue,
Our compensation model is both simple and transparent. There are essentially two forms of compensation we earn.
This is a model where there is an upfront cost, or sales charge, on all new monies that enter your portfolio. For example, a typical one-time fee for a mutual fund investment of $100,000 would be 3.5%. This charge comes out of the initial investment contribution, leaving a net investment of $96,500. This cost would only apply to all new monies entering the portfolio. There is then an additional ongoing annual fee called the expense ratio. The expense ratio is embedded in each of the individual fund holdings. The expense ratio can range from a few basis points up to over 2% per year. Advisors are paid a portion of both the sales charge and ongoing expense ratio. Both the actual sales charge and expense ratio depend upon the amount invested and the type / brand of commission-based vehicle chosen. This discussion will be outlined and agreed upon in our recommendation prior to ever investing any monies.
This is a model where there is a flat cost per year for the total portfolio management. Unlike a commission-based sales charge, there is no initial cost to invest. Most times, the fee is taken from the portfolio on a quarterly basis, so that if the total annual fee were 1%, then the quarterly cost would be .25%. At KC Capital Advisors, we begin portfolio management at 1.3% per year. The annual fee trends downward with the size of the portfolio. We believe our cost structure to be very competitive within the industry. This discussion will be outlined and agreed upon in our recommendation prior to ever investing any monies.