In an interview with Barron’s, Facet Wealth CEO and Co-founder Anders Jones was asked that question. In the interview, he pointed out that the way most of the industry charges clients puts the client’s interests and the financial planner’s interests at odds.

The industry’s standard practice of charging clients a percentage of the assets they manage on the client’s behalf, called AUM (Assets Under Management), means that as the value of a client’s assets increase, so do the fees. Even if the client requires no additional services or expertise, they still pay more.

Instead, Facet Wealth charges clients a flat fee based on each client’s needs. Just because the client’s assets increase, the fees don’t. The flat-fee subscription model, Jones said, is more fair for the client, and it aligns the interests of the client and the financial planner. Read more