Compensation Structures

Please note* I am currently taking new clients. I do however have limited capacity in my practice. In order to keep costs down for you, our commitment of time to you, I do have minimum requirements. I do ask that individuals have at least $300,000 of investable assets OR $180,000 of household income. Most importantly, I seek individuals that are committed to the financial planning process as well as actively participating in your recommendations and implentation.

Today, there are many different types of solutions to help meet your investment or planning needs. It is important to understand that each of them provide a different cost/benefit depending upon the level of service, services performed, and costs. Many simplistic investment platforms market their cost as the sole consideration for their services, it is important to understand that each provider provides different cost/benefit based upon level of service, options, and services performed. It is key to understand that investment management and financial planning is not a commodity as many corporations will attempt to make it seem. Our objective is to provide the greatest benefit/cost ratio relating to a clients full financial plan and investment management program. Vanguard, one of the largest investment companies, concluded in a recent study that a good financial planner can lead to 3% in additional value per year over traditional basic investment1.

Below are some of the key areas we believe our value is derived from:

Financial planning:

· Do you have time to consistently review your plan? Is it worth your time? Do you have the knowledge and expertise?

· Have you noticed how your mortgage, investments, taxes, income, and insurances are largely tied to one another? Having someone review this relationship can help.

· Does your current investment provider manage assets with understanding of your specific tax situation and other accounts? Are you efficiently taking advantage of everything that you can from a tax perspective? We will work directly with your CPA to help manage your finances with respect to your specific situation.

· Is your financial plan properly diversified from a tax perspective? The landscape is ever changing and having different buckets of assets with different tax flexibility can help lower your retirement tax rate, lower your tax rate now, and provide a more efficient passing of your estate to loved ones.

· Have you considered various account titlings/ownership and those consequences of each from a tax, marital future, and estate perspective?

· A good financial planner meets regularly and asks questions to understand how needs change. Is your current investment provider being pro-active or reactive? Sometimes, you may not even realize how your life changes present opportunity within the financial plan.

·  In your old age, it is very important to have someone helping you manage your financial plan and coordinate with your loved ones.

· Do you have a plan on how to setup assets for efficient distribution in retirement? There are many considerations here.

· Does anyone help you review your employer benefits? This includes many categories for employer stock plans and compensation plans, 401(k) plans, insurance options, as well as more considerations for business owners.

· Do you have other assets such as rental properties and are curious how those numbers affect your financial plan?

· Do you have a plan for social security benefits?

  • Do you have a plan for rising long-term care costs?

Investment management programs:

· We are operate on an independent platform which means we are not limited to any one investment company and there for providing a boundless investment menu to find stocks, bonds, mutual funds, ETFs, REITs, UITs, MLPs, CDs, buffered products, annuities, and more

· We have access to institutional class investments, both exchange traded and non. The traditional retail investor does not have access to most of these on their own.

· We have access to numerous institutional money managers to manage your portfolio if need be. This allows us to be unbiased when evaluating our own performance to hire and fire ourselves and various managers.

· Tax awareness—many providers claim to provide tax aware investing. The truth is that this is impossible to do if they do not understand your specific tax situation from year to year. We provide tax loss harvesting, offsetting, and other services in coordination with your tax advisor.

· Are your assets properly diversified? Using a financial planner, may allow you to get far more diversity than a basic investment provider.

· Is your investment provider active or reactive? Because we limit our amount of clients in our practice, we can consistently review financial plans and portfolios and actively make adjustments based on your situation and the economic environment as opposed to a reactive 800 number.

· As the markets fluctuate, there may be ways to increase or decrease distribution risk, take advantage of opportunity, or adjust the financial plan.

· The Vanguard study mentioned prior1 and other studies have suggested a strong relationship between investor emotion and performance. By simply having a degree of separation between you and your investment decisions, we can help filter out emotional decisions in favor of numerical decisions. 

Compensation structures

1.Fee based asset management: -The most common compensation structure used by our clients. This method includes investment management program and ongoing financial planning. We use a standard, tiered fee schedule to calculate investment management fees. Fees are not billed directly to you, they are simply debited from the investment account similar to most investment accounts and 401(k)s that you have. Multiple client accounts from the same household are aggregated for purposes of fee calculations. Our standard fee schedule is as follows:

    Account Balance             Annual Fee %

    $125,000 - $250,000                0.90%  

$250,001 - $500,000                0.81%

              $500,001 - $750,000                0.70%             

$750,001 - $1,000,000              0.65%

$1,000,000 - $2,000,000          0.59%

                  $2,000,001 - $5,000,000           0.52%                  

$5,000,001 -$10,000,000          0.47%

$10,000,000+                              0.42%

All fees are subject to change in unique situations.

Our investment management fees are exclusive of transaction costs, and mutual fund and ETF (Exchange Trades Funds) internal management fees. Individual securities do not have an additional cost. We at Lincoln do not receive any portion of these internal management fees.

2.Financial planning fees - For clients who do not require portfolio management of their assets, they may desire a comprehensive fee-only financial plan. Lincoln along with the highly experienced Sagemark Consulting team, will put together a detailed financial plan for a flat cost.

3.Comissions - For clients who require a pre-packaged investment product, Lincoln/Sagemark does not receive a fee paid by the client. Lincoln/Sagemark is paid via commissions by the investment/insurance provider. All products/providers in the same product class pay equal compensation there for eliminating a conflict of interest in that product class with our clients. 



1-Source: According to Vanguard's study based on their Alpha-framework. Putting a value on your value: Quantifying Vanguard Advisors' alpha, Vanguard research, 2014