Facet Wealth Review – Financial Planning for a Flat Fee
Ever wish your robo advisor could talk? Maybe it’s time to trade up for a dedicated financial planner—a real human that can guide you on your investment journey and everyday financial questions. This option’s low flat fees mean the price makes sense like never before.
- Flat fee structure
- No minimum to begin investing
- Comprehensive financial planning
About Facet Wealth
Based in Baltimore, Facet Wealth 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 investment portfolio, they instead charge a flat annual fee for specific services rendered. For that reason, the fee you’ll pay depends primarily on what type of services you want, rather than on the size of your portfolio.
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 (CFP). The CFP 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 fee. For that reason, it’s not possible to do a direct price comparison between Facet Wealth and robo advisors, most of whom don’t offer life financial planning advice.
When you sign up with Facet Wealth you’ll work directly with a dedicated CFP. However, all contact is either by phone, video chat or email. There are no face-to-face 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 Wealth either. Even if you have no money at all, you can choose what type of services you need performed, and you’ll be charged a flat fee–regardless of how much money you have to invest. This is very unlike traditional financial planning services, that 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 Wealth
As you’ll see, Facet Wealth 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 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 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 Wealth 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 Wealth 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 Wealth CFP can even help you choose your employee benefits and provide assistance in making the right decisions with your company’s stock option plan.
Each of the above goals can be represented by a single dedicated webpage for that area of your financial life.
If you sign up for Facet Wealth to take advantage of the financial planning services, you’ll also get automated investment management at no additional cost. Investment funds are managed through three major brokerages, including Fidelity, Charles Schwab, and TD Ameritrade. 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 Wealth investment management, you’ll need to transfer your current account to one of those four platforms.
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 Wealth, 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.
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 Wealth 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 Wealth is that you will have a direct line to your dedicated CFP. 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: Facet Wealth reports their average client pays about $1600 per year with a portfolio of $250,000 under investment management. But fees will vary by the services you need performed, and are not determined by the size of your portfolio.
According to the company, the annual fee can range between $480 and $5,000. Fees are charged on a prorated monthly basis, and can either be deducted from an investment account under management, or charged to a credit card.
There may be additional fees charged by investment custodian. These can include brokerage commissions or transaction fees involved in the purchase or sale of certain securities, as well as fees charged by individual mutual funds and exchange traded funds.
There are no cancellation fees.
To sign up with Facet Wealth you’ll start by scheduling a 30-minute introductory call with a dedicated CFP. That person will work with you to determine your needs and goals, as well as your budget for the service.
You’ll be required to provide basic information, as well as financial information, such as investment accounts, and to list important financial goals.
Though it isn’t a requirement, you’ll be asked to enter your online financial institution credentials for any accounts included on the platform. This will help your CFP to better understand your overall financial situation. Facet Wealth will not have access to those credentials, and the account information will appear in a “read only” format.
If you decide to proceed with the service, you’ll receive a welcome package that will explain exactly what Facet Wealth can do for you.
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.
Facet Wealth 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.
- Comprehensive financial planning — Facet Wealth 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 Wealth 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 Wealth
If you’re interested in what Facet Wealth 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 Personal Capital. 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 Personal Capital 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 a 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.
If you’re looking for investment management, but you also want comprehensive financial advice, Facet Wealth 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.
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 fee is $2,000, the fee will work out to be 0.20%, which is lower than most robo advisors.
But if your portfolio size is $100,000, and you pay the same $2,000 annual fee for Facet Wealth, it will be the equivalent of a 2% 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 Wealth 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.