Facet Wealth Review: Is Facet a Fiduciary and How Much Does It Cost?

Facet Wealth offers full-service financial planning and financial advisors at a flat annual or quarterly rate.

But how much does Facet Wealth cost? Who would benefit the most from Facet's differentiated pricing structure? Is Facet trustworthy when it comes to financial advice? And what is Facet Wealth's investment philosophy?

I’ll answer those questions and more in this article.

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What Is Facet Wealth?

Facet Wealth is an online-only financial planning company.

Founded in 2016 and located in Baltimore, Maryland, the company claims more than 18,000 members and more than $2 billion in assets under management. The company also employs more than 100 Certified Financial Planners (CFPs).

Operating under what’s essentially a subscription model, Facet Wealth pairs each member with a CFP (financial advisor). Clients, or “members,” get full-scope financial planning, investing help and ongoing 1-on-1 support from an individual advisor.

Most full-service financial advisors charge an annual fee somewhere near 1% of assets under management. Often you need at least $500,000 to become a client.

Facet Wealth doesn’t impose a minimum in terms of assets, although you’ll need at least $500 if you want them to help with your investments.

The company charges a flat annual fee that’s based on the help and services you need. The amount of money in your investment portfolio doesn’t change what you pay.

What Is a Full-Service Financial Advisor?

The world of financial advice and financial planning is the opposite of consumer-friendly. At least that’s true when it comes to industry marketing.

Whether you’re dealing with a grifter or the most ethical, knowledgeable financial advisor in the business, you’ll see these companies and individuals call themselves a financial advisor, a financial planner, a money coach or a variety of other names.

The key? A true full-service financial advisor is about much more than investment advice. Advisors at places such as Facet Wealth offer holistic help for your finances based on your goals and timelines, including:

Financial advisors can get paid in several ways, including:

Some financial advisors get paid commissions to steer you into certain insurance products or investments. Many times these decisions line their pockets but are not in your best interest.

There's a special class of financial advisors called fee-only fiduciaries. These advisors only get paid an annual percentage of the money you entrust to them. They have a legal obligation to do what's in your best interests at all times.

It's confusing because there are "fee-based" fiduciaries who still manage to legally earn money via commissions. But money expert Clark Howard wants you to only work with fee-only fiduciaries.

Is Facet Wealth a Legitimate Fiduciary?

The first thing you need to ask before considering a full-service financial advisor: Are they fee-only fiduciaries?

Facet Wealth’s financial advisors are Certified Financial Planners that are required to be fiduciaries. I consider those advisors to be fee-only fiduciaries. That’s because they don’t earn commissions to direct you toward specific investments or financial products.

So Facet’s advisors are legitimate and trustworthy.

However, you can probably debate whether they're "fee-only" or "fee-based" due to a technicality. According to one Facet Wealth review, the company pays employees commissions for bringing in new members and bonuses for retaining those members.

But again, Facet Wealth’s advisors have no financial incentive to direct you toward specific investments. You pay a flat membership fee annually or quarterly based on the financial services you need. That’s true even if you don’t want investing help — or if you give them an extra $5 million to invest.

So based on the most important filter you should apply to any financial advisor, you can trust Facet Wealth.

How Much Does Facet Wealth Cost?

Facet Wealth’s pricing is simultaneously simple and opaque.

Normally, a full-service financial advisor charges you a percentage fee based on assets under management (AUM). In other words, if you give Fidelity Investments a cool $1 million to manage, and their fee is 1%, you’ll pay $10,000 a year for the company to manage your money.

Facet Wealth charges a flat membership fee. No matter how much money you give them to manage, or even if you don’t want them managing your investments at all, you’ll pay a set amount of money.

"Our flat membership fee generally ranges between $2,400 and $8,000 per year," Facet says on its website.

Facet determines your fee based on “the complexity of your situation.” It asks you to provide your household income and savings and schedule a 30-minute free consultation. Facet will determine your needs during this “get to know you” call.

Then you’ll get a complimentary financial review during a virtual meeting with an assigned Certified Financial Planner. Before you sign on the dotted line and become a member, Facet provides you with an informational packet and tells you the flat-rate fee it will charge based on the services you need.

Message board threads and other Facet Wealth reviews indicate that if you own a business, your cost can exceed $8,000 per year. Also, Facet may or may not have in-house experts for specialty areas such as tax prep and estate planning. You may incur an "admin fee" if Facet Wealth spends time locating and recommending a third-party solution for you.

Converting Flat Fees to Annual Fee Percentages for Context

Facet’s flat-fee cost is a differentiator. And it can be tremendous if the math works out.

However, I find these types of fee schedules to be just a little unsettling, at least in one sense.

The typical full-service advisor charges 1% annually (often a bit less if you give them millions to manage and sometimes a bit more if you’re close to their minimum).

Even if you’re paying the lowest possible annual fee to Facet Wealth ($2,400), you need to give them $250,000 to achieve the equivalent of 1% of AUM.

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Remember, Facet requires a $0 minimum to become a member and a $500 minimum to manage your investments.

So if a potential customer is attracted to Facet because they don’t need $500,000+ to get financial advice, but is not familiar with the industry-standard fees, he or she could be paying a flat rate that converts to much more than 1% annually.

If your finances are more complicated, that’s even more true. Look at Facet Wealth’s flat rate converted into a traditional fee percentage if you need to pay $8,000 per year instead of $2,400.

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Note that in this case, you'll need to give Facet well more than $500,000 to achieve a fee equivalent to 1% of AUM.

Facet Wealth Review: Additional Notes on Cost

Facet Wealth may charge a $250 enrollment fee if you elect to pay quarterly instead of annually. It also may waive that enrollment fee during promotional periods.

The company also seems to offer regular sign-up bonuses for new members who transfer a certain amount of money. I recently saw a promotion offering a $300 bonus if you transfer $5,000+ in assets to them within 90 days of becoming a member.

Facet also says on its website that its portfolio recommendations feature an average expense ratio of 0.07%.

How Is Facet Wealth Different From Other Financial Advisors?

As I mentioned previously in this Facet Wealth review, the company’s cost structure is its biggest differentiator.

I’ll discuss Facet’s investing philosophy shortly. First, let me say that the onboarding process at Facet Wealth seems standard. You’ll discuss your financial circumstances and goals with the company and determine whether you want to become a member.

If you do, you’ll work closely with an advisor to formulate your financial “blueprint” of all the steps you need to take, including separate plans for each of your individual goals.

After that, you’ll typically meet with your advisor two or three times per year, according to Facet Wealth. You’ll be able to reach out to your individual CFP at any point in the year if you have questions.

You’ll also get a dashboard where you can connect all of your financial accounts. Facet Wealth’s tools live on this dashboard as well. So you can track your emergency fund status, savings rate, debt score, credit score and more all in one place.

Facet Wealth Review: Company Investment Strategy Aligns With Clark

Facet Wealth’s investment strategy is similar to that of money expert Clark Howard.

The company believes the market is efficient. That investing is for the long-term. And that the best way to succeed is to diversify, manage risk, stay invested through the ups and downs of the market, keep costs low and avoid paying excessive taxes when possible.

To that end, Facet is a huge proponent of investing in ETFs, particularly outside of protected retirement accounts. This backs their strategy to limit fees and tax obligations.

Facet does have an “investment committee” that evaluates the company’s portfolios and positions quarterly. So there’s some level of oversight for the individual CFPs. However, Facet promises to tailor a personalized portfolio to your individual goals and needs.

Tax-loss harvesting and rebalancing are a big part of its marketing materials and are in line with its investing philosophy.

Facet supports custodian accounts at Apex, Fidelity, Schwab and TD Ameritrade for legacy members. But new customers need accounts at Apex or Fidelity — if you want Facet to control your investments. You can also get investing advice from Facet Wealth and handle it yourself on any platform you want.

Should You Become a Facet Wealth Member?

“No minimums” could be an attractive dynamic for someone who doesn’t have the assets to qualify for a traditional full-service financial advisor. Often those firms or individuals require you to have at least $500,000 to work with them.

However, as you can see from our charts above, be wary about becoming a Facet Wealth member for investment advice if you’re going to pay much more than the equivalent of 1% annually.

Like any full-service fiduciary financial advisor, the full value of working with Facet goes well beyond investing.

If you're in what Clark calls "the accumulation phase" of your career where you're still working toward building significant assets, you may not need help saving for a child's college education through a 529 plan, planning out when to sell your business or doing estate and legacy planning.

If you have children, own a business, live in a blended family or have accumulated six figures or more in assets, a financial advisor is going to be more helpful to you.

In terms of Facet Wealth’s fee structure, it’s outstanding if you have more than $1 million in assets. Even at $8,000 a year, assuming your needs warrant a membership fee that high, you’ll be paying much less than 1%.

Let's say you have significant assets and your financial planning needs are pretty simple and straightforward. You're probably a great candidate to consider Facet.

Although you can start and stop working with any full-service financial advisor from one year to the next, the subscription membership structure at Facet makes it easy to join, get professional help getting your financial goals on track for one year and then go back to managing your finances or choosing a cheaper solution.

Frequently Asked Questions about Facet Wealth

Here’s a look at some questions you may have about Facet Wealth.

What Are the Alternatives To Investing With a Full-Service Financial Advisor?

The first thing you need to do before you hire a financial advisor is to figure out if you need one at all.

This chart should help you understand the options you have when it comes to managing your finances and the associated fees.

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Want investing help and nothing else? Consider a robo-advisor or a hybrid advisor. Want access to automated financial planning tools and some level of limited human advice? Perhaps you'll feel comfortable with Vanguard Personal Advisor or Betterment.

If you just want to hit the “easy” button and invest for retirement without paying any additional fees, keep reading to learn Clark’s investing strategy.

What Does Clark Value in a Financial Advisor?

Above all else, find a financial advisor who is legally required to make recommendations that are in your best interest, Clark says. Make sure that you’re working with a fiduciary who doesn’t make any money based on what investments and insurance products they recommend.

That’s the most important thing.

Beyond that, make sure that you need help beyond just investing.

“The main purpose of using a financial advisor is when you’re trying to see if you’re doing things right to meet your long-term financial goals,” Clark says.

“They’re talking to you about whether you have your will up to date. Is your planning done well from a tax standpoint? What are you doing in case you are in the 70% that ends up needing assisted living?

“With real financial planning, it’s not really about what investment you’re in. Where the real importance comes with a financial planner is the estate and tax planning and goal-setting.”

What Is Clark’s Investing Strategy?

Investing is exciting. After all, the entire idea is to make money on the money you already have. And inevitably to have more money in the future so that you can finance your biggest dreams.

However, not everyone is ready to invest. First, you need to make sure you're living on less money than you make, Clark says. And you need to pay off all high-interest debt (such as credit card debt) and build at least a modest emergency fund.

Once you’re financially stable, capable of paying for some reasonable unexpected expenses, not living paycheck to paycheck and not paying an obscene amount in interest, you’re ready to invest.

The No. 1 goal of investing, Clark says, is to fund your retirement. He wants you to secure any available 401(k) match from your employer before all else. From there, try to slowly increase the amount of money you save and invest from every paycheck — perhaps by increasing your savings rate by one penny for every dollar you make every six months.

Clark often recommends a target date fund for people investing through a retirement account. And he recommends low-cost, broad index funds or ETFs if you're investing on your own.

Final Thoughts

Facet Wealth offers a more modern, digital-first approach to investing and financial advice.

Tired of the 1% model of traditional financial advisors where you meet in person, pay more money to get the same service as you accumulate wealth and deal with sometimes clunky and outdated digital tools and websites? Facet Wealth presents an alternative.

I’ve reviewed Facet Wealth and can tell you that you can trust the company to pair you with a true fiduciary advisor. However, not everyone needs a full-service financial advisor.

And Facet’s flat-rate fee model is a double-edged sword. Before you become a member, make sure that you understand exactly how much you’re paying — and how it compares to the industry-standard AUM fee percentage model.

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