ETFs Fuel Flat Rate Financial Planning

September 14, 2017

[This article appears in our October 2017 issue of ETF Report.]
 

Justina Welch, Clint Thomas

Justina Welch/Clint Thomas
Principals/Co-Founders
Integrity Wealth Solutions

Clint Thomas and Justina Welch hate high fees. Really hate them.

"I literally just got off the phone with a prospect who told me, 'I don't know why more people aren't outraged with how fees are charged in your industry,'" says Thomas. "Me neither."

That's in part why Thomas and Welch founded Integrity Wealth Solutions, a full-service financial advisory firm headquartered in Greenwood Village, Colorado.

Unlike most RIAs, which charge clients a percentage fee of assets under management, Integrity Wealth Solutions employs the rare flat-fee model, with broad pricing tiers that span millions of dollars in portfolio assets. Under their model, an investor with a $1 million portfolio pays the same as someone with $3 million; someone with $10 million pays the same as someone with $15 million.

It's a fairer way of doing business, says Welch.

"We're not working for free, of course," she says. "But compared to a traditional fee structure, we feel ours is the more equitable way."

Flat Fees Are Cheaper

Though the firm was founded just last year, Welch and Thomas have already attracted $20 million in assets under management with their tiered flat-fee model.

Flat fees often end up being substantially cheaper for clients than a percentage fee. Consider a typical portfolio with assets between $3 million to $6 million. Under a 1%-of-assets fee, that would generate an annual charge of $30,000 to $60,000. In contrast, Integrity Wealth Solutions clients in that same pricing tier would pay $10,000—a third to a sixth of what they'd pay elsewhere.

Furthermore, clients still get a customized financial plan and investment portfolio tailored to their personal goals and risk tolerance. "We aren't using cookie-cutter portfolios," says Welch. "Whether it's retirement or educational expenses or something else, we build everything we do around what the individual wants to accomplish."

Thomas and Welch serve clients around the country, connecting with their clients regularly via video-chat apps, email newsletters and reports, and, of course, good old-fashioned telephone calls.

"Technology has improved so much, and costs of communication have come way down," says Welch. "We don't necessarily need to be in person anymore."

‘We Like To Help People’

A Denver native, Welch knew from a very early age that she wanted to pursue a career in finance. "My mom had a costume shop, and as a kid, I liked to go balance her books," she says. "I liked the problem-solving aspect of it, of being able to sort the signal from the noise."

She started working for her mother's financial planner when she was just 15. "He had this way of connecting with people; he became part of our family," she says. "Working with him, I knew that's what I wanted to do, too."

After working her way through graduate school at a Boulder-based financial consultancy, then a stint in the insurance division of Fisher Investments, Welch moved back to Denver in 2012. She started working at an advisory practice in town. There she met Thomas, a transplanted Texan and Merrill Lynch veteran who'd been at the advisory for several years already.

Welch’s and Thomas's experience with their previous employer wasn’t optimal, and they don't like to say much about the firm or their time there.

But when they left to launch their own shop together last year, Thomas and Welch decided they’d put their negative experiences to good use.

"From the very beginning, our goal was to put clients first, before the bottom line," said Welch. "We just want to help people. We like helping people. It sounds silly or cliché, but it's the truth."

 

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