Advisors typically bill based on Assets Under Management (AUM). In general, the larger the portfolio managed, the more fees are earned by the advisor. As an advisor myself, I will frequently tell potential clients that this fee structure puts us “on the same side of the fence” as the client – our only incentive is to grow their portfolio.
Yet, when we calculate fees this way, how do we advise our clients when they seek input on:
Making charitable donations?
Paying off their mortgage?
Buying a second home?
Taking expensive vacati
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