Written by: Amber Ott

How Agili Makes Money…

Agili is a fee-only firm.  This means our sole source of revenue is the fees we earn from our clients for managing their assets.  That makes us only accountable to our clients.  And we like working for you.

We charge clients based on the value of the assets we manage for them (also known as “assets under management” or AUM) on the following annual fee schedule:

  • 1.00% on assets under $2 million, plus
  • 0.50% on assets from $2 million to $10 million, plus
  • 0.35% on assets over $10 million

So, for example, if we manage $3 million for a client, the client would pay us $20,000 (1% of $2 million) plus $5,000 (0.50% of $1 million) for a total of $25,000 annually.  This equates to a “blended fee” of 0.83% annually ($25,000/$3 million).

On the last day of the quarter we take a snapshot of each client’s portfolio value and calculate the fee each client owes us from that number.  At the beginning of the quarter, clients pay one-fourth of their annual fee in advance (i.e., for the services to be provided in the coming quarter).  So, the client from the above example whose portfolio is valued at $3 million on December 31, for example, would pay us $6,250 ($25,000/4) in January for services to be provided January 1 through March 31.

How Agili Does NOT Make Money…

Now that you know how Agili makes money, let’s talk about how we do NOT make money.  Unlike brokers and certain other financial advisors, Agili does not make any sort of commission selling any sort of investment product.  In fact, we do not “sell” anything.  We invest our clients’ money, and we do not earn commissions for buying, selling, trading or holding any specific investment.  This means we are not incented to invest in any specific investment product other than the one we believe is the best for you.

Agili also does not charge “performance fees” – that is, an additional percentage of your assets if your portfolio performance is above a certain level.  Of course, we make more money if your portfolio grows (since we would assess our standard fee schedule on a larger base of assets), but we don’t make any money beyond what is listed above if your portfolio performs well.  We like that our compensation structure creates a “we win if you win” scenario but does not go so far as to incent us to take inappropriate risks with your portfolio in an attempt to access an additional reward.

Finally, Agili does not accept referral fees from any service provider.  If we refer you to an accountant, attorney, banker, real estate broker, or anyone else, we do not make money from them.  Agili employees are allowed to accept small gifts of a “de minimus” value (based on IRS guidelines, under $100) from service providers, but those are designed to be insignificant enough to not influence any recommendations our Financial Strategists might make to clients.  When we refer you to a service provider, it’s because we believe that is the best person to serve you and help you achieve your goals.

Our goal is to be 100% transparent in the fees we charge clients and the way we make money.  If you have any questions, please feel free to contact the author or your Financial Strategist.