Not all advisers can offer the best options for you. Some have company products to sell, and some only have access to a limited number of options. How can you spot them?

Advisers in Captivity


Many advisers affiliate with one large company (called “career” or “captive” advisers). These companies have brand recognition, ad budgets, and impressive offices. If you have seen a TV commercial for a company, odds are they fit in this category.

To pay for those expenses, these companies provide their advisers incentives to sell you their products. Some require minimum sales “production” and some provide perks to advisers for reaching sales goals. Some limit access to certain products or make it more difficult to use a product outside of their firm.

One reason I started III Financial was to free myself from these constraints.

This simplifies the adviser/client relationship because there are no competing interests involved.

Declaration of Independence


Independent advisers take the harder path by cutting out third-party incentives. This levels the playing field so that no recommendation creates a financial incentive for the adviser.

As a completely independent financial planner, I am free to help select the best options for you, regardless of the company offering the right solution.



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No Experience Necessary


The bar is low to call oneself a “financial adviser”. Some stockbrokers executing trades all day use the title. Insurance agents may use the title because the title “insurance salesman” sends many people running. And some comprehensive financial planners use the term as well.

For each job, the amount and type of training required varies greatly. What the title “financial adviser” fails to indicate is the level of experience and knowledge the adviser possesses.


The Certified Financial Planner™


Though many professionals call themselves “financial advisers”, those holding the CFP® designation have completed extensive training and experience requirements and are held to rigorous ethical standards. Only those of us who have studied long hours, completed the 6 courses, and passed the (at the time, grueling two day 10-hour) test are authorized to display the CFP® marks. It is estimated that only 10%-20% of financial advisers hold this designation.

Pay attention! Some CFP® professionals work as captive employees of large firms. Conflicts between their employer and their CFP® designation can hinder the adviser’s ability to work in your best interest.




“What am I paying and for what?” sounds like a simple question, yet many people find their adviser dancing around the issue. The most common methods of compensation add many conflicts. Also, costs can be like termites: you may not see them but they can still do severe damage.

Hidden Commissions


Commissioned-based advisers may provide advice for what appears to be little or no cost. Only if you buy products from them will they get paid. How could this work to your disadvantage?


Different products and companies pay differing levels of sales commissions. Minimum quotas and sales contests on certain products or “production” can create conflicting incentives. Even trustworthy advisers can fall prey to the external influences!

Disproportionate Fees

Mutual fund sales commissions often cost 3%-5% of the investment when you buy them. The ongoing expenses are often 0.50%-1% every year (moving $500k this way could cost you up to $25,000!). Brokerages and mutual fund companies rewards the salesperson up front for “making the sale”. There is little financial incentive for on-going support.

Legal Complications

Did you know that a “broker” and an “investment adviser” are two different roles under the law? A broker has a legal duty to the broker-dealer they work for, not the client. By law an investment adviser must put the client’s interests ahead of his own. To learn more, simply Google “financial fiduciary standard”.

Asset Fee Conflicts


Advisory fees, often referred to as an “Asset Under Management” fee, usually get disclosed as a small percentage. The argument for it is that if the value of your account goes up, then the adviser benefits. If the value drops, then the adviser shares the pain. Why would this model cause problems?

Impact Decisions

Several important decisions at retirement affect the size of your nest egg. Should you pay off your home? Should you exchange assets for more guaranteed income? Should you take the lump sum from your pension? The choices you make could change your account balance and reduce the adviser’s compensation!

Ignore Complexity

Let’s compare two clients. Client A has a straightforward financial situation. Client B deals with inheritances, complicated family dynamics, and estate planning issues. Why charge them the same amount for advice just because they have the same account balance?

Penalize Wealthier Clients

Why should a client with $5 million pay so much more than a client with $1 million? More money does create some extra complexities. The complexities are not enough to justify such a price difference. Does your doctor charge you based on the value of your home?

Who is Flying Your Plane?

If you are flying to Hawaii, would you prefer a pilot or a travel agent in the cockpit? A travel agent can sell you a ticket to Hawaii and wish you a great trip, but that this the end of their job. A pilot knows how to make adjustments when (not if) there is turbulence so that your plane arrives in Hawaii.


My industry has many “travel agents” disguised as pilots. They sell you their tickets/products but nobody guides your plane to your destination. Many people (maybe even you) have worked with advisers like this without ever knowing the difference. I firmly believe a true “financial pilot” adds tremendous value by guiding you from take-off (growing assets) to landing (spending assets) while making sure proper protections (insurance) are in place.

The Solution: Fixed Fees


Level, fixed fees can be set based on the complexity of your situation, not the dollars in your account. Advice can cover areas of your financial life where the sale of products is not needed (like Social Security or tax planning).

On Your Side

Without compensation from any entity other than you, an adviser with a fixed fee has no incentive to suggest any solution other than what they see as the best for you.

Clear Fees

A flat fee for continuing comprehensive financial planning AND investment advisory needs gives you a known and non-variable cost to your advice. No hidden fees, no surprises, no hourly charges.

Save Money

For many clients, a flat fee combined with the use of very low expense investments cuts their annual costs by 50% or more compared to an AUM model! You can simply redirect some of the costs you don’t currently see toward an advocate for you, and keep the rest in your pocket.

How Much Difference Can This Make?


Many Many Certified Financial Planner professionals charge 1%+ of your asset value. They also often use costly mutual funds.

Over 20 years, the difference between this fee and a fixed fee can be significant! In this case a $2,000,000 portfolio would forgo $2 million more in profits.


Assuming 8% annual gross return, 1% AUM advisory fee deducted quarterly, and 0.75% mutual fund expense ratios. III Financial using $2500/quarter fee, increasing $250/quarter every 2 years, and 0.1% fund expense ratios.


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