Only a life lived for others is a life worthwhile.
–Albert Einstein

Fee for service: A simple enough concept, but in the investment advisory profession, often interpreted and applied in many different ways. As a fee-based registered investment advisor, COVENANT charges a quarterly fee based on a percentage of a client’s assets under management. Admittedly this sounds similar to the fee structures of many RIA’s, but where COVENANT differentiates itself is in the amount of the fee percentage charged. All too often the fee percentage starts at 1% (or also described as 100 basis points; i.e. 100 basis points equal 1%). The percentage fee is then adjusted up or down solely dependent on the size of the client’s portfolio under management. True larger portfolios (say $5Mil and higher) do normally receive a lower fee, but this is usually based on the competitive nature of the local community of RIA’s, and fee ranges often range between say 20 basis points to 200 basis points (2%) without much regard to the service being rendered.

At COVENANT, we believe our fees should reflect the value of our services and not merely an arbitrary percentage influenced mostly by competitive pricing. Thus, we structure our fees to be more reflective of the value of our service. We still calculate our fees based on a percentage of client assets under management, but to the extent possible, we try and structure portfolios so the COVENANT fee coupled with the fees charged by underlying mutual funds and ETF investments do not exceed 100 basis points (1%). For smaller portfolios, our minimum fee is $500 per quarter which we believe to be reasonable for our overall management services.  Financial planning services are provided based on hourly fees which we estimate before service begins.