The Line Your Advisory Website Leaves Out

Read ten financial advisory websites in a row and you will learn a great deal. You will learn about holistic planning, disciplined process, and the fiduciary standard. You will see a photograph of a couple on a dock at sunset, very pleased about something. What you will rarely find is the fee.

That is not an accident. It is the number the industry would rather discuss in person, after the rapport and before the paperwork. It is also the number most prospective clients are looking for.

Why the fee matters more than it looks

An advisory fee of one percent sounds small. It is charged on the balance, every year, whether the market is kind or not, and it compounds the way the returns do — in reverse.

Here is an illustration, and only an illustration. Take $500,000 and assume, for the sake of arithmetic, a steady 6 percent a year for thirty years. It grows to roughly $2.87 million. Take one percentage point off that return each year for a fee, and the same money grows to roughly $2.16 million. The difference is about $710,000.

Real markets do not move in straight lines, fees are structured in many ways, and nothing here is a forecast or a recommendation. But the shape of it holds: a percentage fee is one of the few costs that grows as the account does, and few people have ever seen it added up.

The case for publishing it

An advisor who publishes the fee, and shows what it costs over time, is making the most persuasive argument available: I have nothing to hide from the arithmetic. The advisor who charges more and delivers more can say so, and show why. The one who cannot defend the fee has a different problem, and no website will solve it.

It also changes who calls. A prospect who has seen the number before the first meeting has already made peace with it. The conversation starts where it should — with the plan, not the price.

And there is nothing radical about it. An SEC-registered adviser already describes its fees in Form ADV Part 2A, the brochure it must give clients. Putting that information on the website, in plain English, is simply meeting people where they look.

What the rules govern

This is not legal or compliance advice. For SEC-registered investment advisers, advertising is governed by the SEC’s Marketing Rule — Rule 206(4)-1 under the Investment Advisers Act. State-registered advisers answer to their state securities regulator, whose rules can differ. Run anything you publish past your compliance officer or counsel. With that said, three areas deserve the most care on a website:

• Performance. Under the Marketing Rule, an adviser that shows gross performance must also show net-of-fee performance, with at least equal prominence. Hypothetical performance carries additional conditions.
• Testimonials and reviews. The rule permits them, subject to disclosures and conditions — including whether the person is a client and whether they were compensated. A wall of glowing quotes pasted in without those disclosures is a liability, not a feature.
• Calculators. A growth illustration stands on firmer ground when its assumptions are on the page — the rate, the fee, the time horizon — and when it says plainly that it is an illustration and not a projection.

Notice that none of those areas stops you from telling a prospect what you charge. The fee is the one line on an advisory website that works harder the more plainly it is written.

A demonstration

We built a complete advisory homepage around this idea, for a firm called Harbor Ledge. The firm is fictional — invented for the demonstration — and every figure on it is made up. Its centerpiece is a growth calculator that prints the line other calculators leave out: what the advisory fee costs over thirty years. It labels its return as an assumption, calls itself an illustration rather than a projection, and marks its reviews as invented, with a note that real firms face conditions on testimonials.

If your fee is worth defending

Then your website should defend it. Here is how we build financial advisor websites — and, in the spirit of the argument, our own prices are published.

Or get in touch. We will show you the line, and how to print it.