Business Model & Compensation
Hybrid Business Model
Stephen Mallery operates under the “hybrid” business model with multiple licensing, encompassing two registrations for financial advisers (fee-based advice), registered representatives (securities brokering and servicing), and insurance licensing (for life, disability, and long-term care insurance). Multiple licensing enables him to maintain a full toolbox, providing flexibility and options designed to benefit clients.
Stephen has a strong preference for the fee-based approach because it calls him to focus solely on the best interests of the client (see Fiduciary Standard of Care). It enables him to provide professional advice without having to relying on transactions to generate a commission. The model is transparent, flexible, and aligns his interests with yours.
Note: Although paying an ongoing “fee” sounds expensive, it is often less expensive than other commission based options. Fee-based investing generally means paying the adviser a known amount for ongoing account management services provided, with transparency and accountability. For planning work, it enables the adviser to work on a fee-for-service basis without requiring investment services if you want only planning help.
Under the “Registered Representative” model, the financial professional is compensated through sales commissions, which require a purchase transaction. Some products pay an ongoing servicing fee, also known as a "trail commission" or 12b-1 fee in order to compensate the registered representative for ongoing services provided. These fees are generally disclosed in the product's prospectus.
Registered Representative licensing can be useful depending on the client's needs and objectives. Some account registrations and financial products can be accessed only through commission channels, so Stephen maintains dual licensing so that he may access -- or service -- those products, as appropriate/needed.
The majority of Stephen's work is under the fee-based RIA model.
Stephen Mallery conducts all of business (planning, investments, and insurance) under the fiduciary standard of care.
Stephen's specific compensation for engagement will depend on the amount of work involved, the complexity of your situation, assets under management, purchases of registered products or insurance etc. All fees are negotiable. Let’s discuss the specifics and start our collaboration with a fee agreement that is transparent and fair for all parties.