A message to our clients

June 28, 2016

Forrest Gump is one of my favorite movies. Forrest was chided for his simplistic view of the world. His blinders for social norms turned out to be the secret to his continued success – that plus a little luck. When I started Aptus five years ago, I asked some simple questions: Why can’t young people get financial planning? Why do advisors charge a percentage fee? Why don’t advisors tell their clients how much they are paying for planning? I received the same answer: This is how everyone does it. In response, I started a business where I sold my advice by the hour. Unlike Forrest, no one made fun of me, but they warned that this business might not survive. Like Forrest, luck swung our way when the Department of Labor announced regulations in 2015 that will create greater fee transparency and require advisors to put their clients’ interests before their own financial interests.

This is how we do business: We charge a fixed fee. And we tell clients what that fee will be ahead of time.

Here is how our peers do business: They charge a percentage fee on your money which they invest on your behalf. Clients pay different amounts depending on the amount of money they invest. Often, clients only know what they pay by looking at quarterly statements themselves.

To illustrate these different approaches, consider the chart, below. If you calculate the industry standard fee of 1% of assets over a 15-year period, you can see the dollar amount of the fees paid over time.

Imagine a client paying their advisor over $200,000 in fees over a 15-year period and not even realizing it. Unfortunately, client investment costs are not limited to these direct costs.  In addition, most of these advisers then engage in an active strategy that usually includes actively managed mutual funds with high expense ratios.  Unless their active strategy outperforms the market on average, the higher expense ratios will further erode client returns.

Since July 2011, we have relied on the same strategy. Here’s a summary:

(1)   Flat hourly rate: We maximize our planning time to deliver the quality services we think clients need without draining them of their own, hard-earned money.

(2)   Give people the tools to invest: We give you investment advice and then teach you how to carry it out on your own. This approach significantly lowers the fees of investing and requires us to earn your business every year.

(3)   No conflicts of interest: By not making money from investing your money, we avoid significant conflicts of interest. For example, young doctors with large debt holdings at high interest rates have to make tough decisions on whether to invest or to pay off debt. Is a financial planner who only makes money if the doctor invests the right person to help with that decision?

If you like our model, we ask for your help in spreading the word about Aptus. We want to expand this business to help more people get a head start financially. Most young people still think that financial planning is reserved for the wealthy. We are working to open up the financial planning industry to everyone.  We do planning for every client, regardless of how much they have in assets.

Our website, www.aptusfinancial.com, has everything a potential client would need to know about our financial planning and investment planning services as well as a detailed understanding of our fixed price. We also offer 15 minute interviews for anyone who wants to run their financial situation by us to see if we would be a good fit. They can call us at 501-907-1993 or email us at sc@aptusfinancial.com.

The team at Aptus Financial is ready to provide you with better services at the same cost-effective rate. Thanks for trusting us year after year with your most important financial decisions. We are here for you for the long haul.

Warm regards,

Sarah Catherine Gutierrez