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If you’re looking for comprehensive financial planning advice, but you don’t want to pay the high fees typically charged by financial advisors, Facet may be exactly the service you’re looking for. They provide all the services of traditional financial planners, but at much lower fees. And they’ll even include investment management in the package. This can be especially beneficial for those with portfolios under $500,000, since traditional financial planners often won’t work with smaller clients.
In this comprehensive Facet review, we’ll break down their comprehensive service offering, and help you decide whether this type of financial planning is right for you.
Based in Baltimore, Facet was launched in 2016, to serve those who are looking for something of a hybrid between automated, online investment platforms (robo advisors) and full-service financial advisors. Instead of focusing only on investment management, they provide holistic financial management, covering all aspects of your financial life.
But rather than charging annual fees based on a percentage of your assets under management, they instead charge a flat annual membership fee.
And unlike robo advisors, where your portfolio is invested on an automated basis with very little direct human contact, you’ll instead work directly with a dedicated Certified Financial Planner™ professional. The CFP® professional will work with you to establish your financial goals, and immediate and future needs, then come up with an action plan to help you get to where you want to go.
Investment management is available and it’s included as part of the basic annual membership fee. For that reason, it’s not possible to do a direct price comparison between Facet and robo advisors, most of whom don’t offer life financial planning advice.
How Facet Works
When you sign up with Facet you’ll work directly with a dedicated CFP® professional. However, all contact is either by phone, video chat or email. There are no in person meetings, though due to technology that’s becoming increasingly unnecessary.
You don’t need a certain minimum amount of investable funds to work with Facet either. You can work with them even if you don’t have anything to invest. This is unlike traditional financial planning services, which typically require large minimum account balances to provide advice.
All information relating to your financial situation will appear on an intuitive dashboard, enabling you to get a 360° view of your financial life on the platform.
If you do choose the investment management option, one big advantage is that they do provide investment recommendations for employer-sponsored retirement plans, like 401(k)s. They can’t directly manage employer plans, but the advice they provide will help you better manage your plan going forward.
Financial Services Provided by Facet
As you’ll see, Facet goes well beyond simple investment management provided by robo advisors. They provide investment management, but also comprehensive financial planning services, including the following:
Retirement Planning: Your CFP® professional will put together an action plan to help you reach your retirement goals, as well as help you to understand the strategies behind it.
Education Planning: If you have children, they’ll present options to pay for their future education.
Life Planning: Your Facet advisor will help you to plan for what’s most important in your life.
Asset Management: This is the investment management part of the Facet program. It will include constructing a well-diversified portfolio to help you achieve your long-term goals.
Income Tax Planning: This service involves minimizing the impact of taxes while implementing your financial plan and investing activities.
Insurance Planning: If you don’t know a whole lot about insurance, your financial advisor can help. They’ll recommend the best types of plans to provide specific protections you need for yourself and your family.
Estate Planning: Facet will work with your personal attorney to create an estate plan to provide for your loved ones after your death.
Legacy Planning: This involves creating a plan to make provisions for either your family or a favorite charity. It will enable you to structure your finances in such a way that you will be able to provide for the people or organizations you care for most.
Retirement Income: Apart from retirement planning, it’s also important to successfully manage income in retirement. Your financial advisor will take into consideration your income from Social Security and pensions, in creating a distribution plan from your retirement savings.
A Facet CFP® professional can even help you choose your employee benefits and provide assistance in making the right decisions with your company’s stock option plan.
Facet Investment Strategy
If you sign up for Facet to take advantage of the financial planning services, you’ll also get investment management at no additional cost. Investment funds are managed through four major brokerages, including Fidelity, Charles Schwab, TD Ameritrade, and Apex. There is no minimum initial investment requirement.
Because those are among the largest investment firms in the industry, there’s a good chance you invest with one of them already. But if you don’t, and you want to take advantage of Facet investment management, you’ll need to transfer your current account to one of those four platforms.
Investments will be managed using primarily mutual funds and exchange traded funds (ETFs), though the company does indicate use of individual stocks and bonds are possible on a discretionary basis.
Portfolios are designed based on your personal investment risk tolerance, as well as your time horizon and investment goals. Your portfolio may be constructed based on the following risk levels:
- Moderately Aggressive
Your portfolio will be fully managed by Facet, including periodic reviews, which will be conducted at least annually. More frequent reviews may take place based on a change in your personal investment objectives, as well as in response to investment market conditions, or upon request.
Other Facet Features and Benefits
Investment accounts that can be managed: Taxable brokerage accounts, and any self-directed retirement plans, including traditional, Roth, rollover, SEP and SIMPLE IRAs, as well as solo 401(k) plans. And though they can’t manage them directly, Facet will provide management assistance with employer-sponsored plans, like 401(k) and 403(b) plans.
Availability: All 50 states, plus the District of Columbia, Puerto Rico, and the U.S. Virgin Islands.
Customer contact: One of the advantages of working with Facet is that you will have a direct line to your dedicated CFP® professional. When you call in, it won’t be to a call-in center. Contact is by phone, videoconference, or email, all of which are available mornings, evenings, and even on weekends.
Fees: Membership fees will vary by the services you need performed, and are not determined by the size of your portfolio.
Prices range from $2,400/year ($167/month) to $8,000/year ($667/month). Most members fall in the middle of that range.
There are no cancellation fees – but any annual fees already paid will not be returned.
How to Sign Up with Facet
To sign up with Facet you’ll start by scheduling a 30-minute introductory call with a dedicated CFP® professional. That person will work with you to determine your needs and goals, as well as your budget for the service.
When you schedule your introductory call, you’ll be required to provide basic information, as well as financial information, such as investment accounts, and to list important financial goals.
If a Facet membership feels right to you and you agree to sign up, you’ll go through Facet’s digital onboarding process which is a guided experience that consolidates all your key information in one place. The full process takes 30 – 45 minutes but you can leave and revisit the process at your convenience. Once the digital onboarding is complete, the first meeting with your planner will be scheduled. They will come to this meeting prepared after reviewing all the information you submitted during the digital onboarding process and can start discussing your financial priorities.
The CFP will create an individually designed financial plan, though the creation of that plan may require several direct sessions to complete. Once again, the fees you’ll pay for that plan will depend on the individual services you want.
The CFP will create an individually designed financial plan, though the creation of that plan may require several direct sessions to complete.
Facet Pros and Con
- Flat fee structure — This will work very well for those with larger portfolios.
- No minimum to begin investing — There are no upfront fees.
- Full service financial planning — Facet takes a holistic view of your entire financial life, rather than focusing exclusively on investment management. Investment management is included in your complete financial planning package.
- The company is a fiduciary — This legally requires them to represent your best interests, and not to promote their own products to generate additional income.
- Works with major investment brokers — Facet works with four big investment platforms.
- Can be pricey — The flat fee structure will be high for those with smaller portfolios.
- No face-to-face meetings — All contact is by phone, email or video chat.
- Difficult to estimate costs — Since fees are based on the level of service, actual costs can be difficult to determine upfront.
Alternatives to Facet
If you’re interested in what Facet has to offer, but you’d like to check out the competition, we recommend the following financial management services:
Probably the most popular investment platform among robo advisors with personal financial advice is Empower. The platform is free to use, if you’re looking for budgeting tools and limited investment advice. But with a minimum initial investment of $100,000, you can take advantage of Empower Wealth Management, that provides full investment management. And with at least $200,000, you can have regular access to financial advisors. Management fees start at 0.89% for a portfolio up to $1 million, but slide down to 0.49% for portfolios greater than $10 million.
Betterment’s Premium plan works similar to Personal Capital, but at a lower fee. They charge an annual management fee equal to 0.40% of your account balance, and there’s no upfront fee. That means you can have a $250,000 portfolio managed for $1,000 per year. The service provides automated portfolio management (robo advisor), with unlimited access to Betterment certified financial planners. Qualification requires a minimum account balance of $100,000.
But at an even lower fee structure is Vanguard Personal Advisor Services. The minimum required investment is $50,000, and the annual fee is just 0.30%, sliding all the way down to 0.05% for portfolios of $25 million or more. An investor with $250,000 can have his or her portfolio managed for just $750 per year. The service offers unlimited access to personal financial advisors, including a dedicated advisor if your portfolio is $500,000 or more.
Facet vs. Robo Advisor
Those considering Facet might find themselves debating between Facet and a robo advisor for managing their money. The truth is that both types of service have something to offer different customers.
A robo advisor is an algorithm that manages your investments based on a risk tolerance that is set upon signing up for the service. Robo advisors occasionally offer personalized advice, but this often comes with a fee. At best, you’ll have limited access to a financial planner. Fees are usually set based on a percentage of what you invest, plus set fees (although exact details depend on the robo advisor).
Whether or not you want a robo advisor depends on whether you want to take a hands-on or hands-off approach to managing your money. Robo advisors are automated investment strategies, and are therefore a very hands-off approach. Facet allows you more freedom to customize your plan, with real access to human advice, and a fee structure that isn’t only based on how much you invest.
Both types of investment have a lot to offer, so it will depend on the person to decide which is most suited to their personal risk tolerance and investing goals.
What Others are Saying – Facet Reviews
To get a better understanding of what people think about Facet, it helps to look at third-party reviews. Reviews are a great way to get a non-biased perspective of what others are saying about Facet. Prospective clients will be happy to learn that Facet reviews are mostly positive overall.
Better Business Bureau has Facet at an A+ rating. A+ is the highest rating available on BBB’s 100-point rating scale. The rating scale is based on an aggregate of factors, including the business’s complaint history, transparent business practices, time in business, advertising issues, licensing and government actions, and more. An A+ is an encouraging sign for prospective customers of Facet.
Business Insider has also given Facet a positive review. They state that Facet is “best for comprehensive financial advice and those with modest or sizable assets”. Business Insider had overall positive things to say about the service, but also said that those with modest assets or one-off questions may not benefit from Facet. Business Insider gave Facet a rating of 4.6/5.
What is a Certified Financial Planner™ professional, and why is having one so important?
CFP® professionals are required to be certified, and have experience in all aspects of financial planning. Not only can they provide the information you’ll need, but they can recommend third-party sources for additional advice when necessary. A dedicated CFP® professional is part coach, part advocate and all partner. Working with a CFP® professional means you never have to deal with financial concerns alone.
Why is it important that Facet is a Fiduciary?
A fiduciary is a financial professional with a legal and ethical relationship of trust to you as a client. They’re legally required to make financial recommendations in your best interest alone. All Facet CFP® professionals are fiduciaries.
Why do I need Facet when I can just use a robo advisor to manage my portfolio?
Because Facet will provide investment management services, comparable to a robo advisor, but they also work with you to better manage your entire financial life. For example, they can provide investment advice on how to better manage your employer-sponsored retirement plan. They can also work with you in other critical areas of your life, such as insurance, estate planning, and preparing for your children’s college educations.
How does Facet help me manage my employer sponsored retirement plan?
Facet doesn’t directly manage your retirement plan. But they can provide you with advice on portfolio allocation, as well as selecting from the best investment options in your plan. This may include certain funds that will create a more well-balanced portfolio, as well as include investments with lower fees.
How do I know a Facet CFP® professional will work in my best interest?
As fiduciaries, Facet CFP® professionals are legally required to work in the best interest of their clients. Additionally, because Facet charges flat fees, there are no worries associated with CFP® professionals giving you bad advice to profit off commissions. Facet also boasts a rigorous recruitment process to vet every person they hire, putting a particular emphasis on kindness and honesty.
Is Facet the Right Choice for You?
If you’re looking for an investment advisor, but you also want comprehensive financial advice, scheduling your introductory call is worth checking out. They provide professional-level financial advice, including retirement planning, estate planning, education planning, and income tax planning for a fraction of what you’ll pay to an independent CFP® professional.
It’s also an excellent choice if you’re not simply looking for the type of automated investment management provided by robo-advisors.
However, if you’re mainly interested in investment management, the value of the service may depend primarily on the size of your investment portfolio. For example, if you have a $1 million portfolio under management, and your total annual membership fee is $2,400, the fee will work out to be 0.24%, which is lower than most robo advisors.
But if your portfolio size is $100,000, and you pay the same $2,400 annual membership fee for Facet, it will be the equivalent of a 2.4% annual fee. That’s many times higher than what robo-advisors will charge, and even higher than traditional human investment advisors.
However, you also have to consider the value of the financial planning advice being provided. If you’re looking for ongoing financial advice, the Facet fee will be well worth paying. But if you’re looking for one-time advice for very specific areas of financial planning, and mostly interested in ongoing investment management, it may be more cost-effective to invest through a robo advisor, and to get the needed financial planning advice from an independent CFP® professional.
At the end of the day, you need to consider your own financial goals, personal risk tolerance, and what you want from a financial services provider. Only with a proper understanding of these personal preferences can you make the choice that’s right for you.