Alloy Wealth Management is Fool’s Gold for Investors
#1 Alloy is a minefield of conflicts of interest
Technically Alloy advisors can claim they are fiduciaries, but it would appear from their regulatory filings that most of their revenue is from commission compensation from selling insurance and annuities, products that explicitly aren’t held to a fiduciary standard.
Ark Royal does NOT take commissions of any kind. We are a 100% fee-only firm, and never conflicted by commission compensation.
#2 What you need to know about revenue-sharing
Alloy has fee sharing arrangements with third party investment advisers (TPIA) Foundations Investment Advisors & Brookstone Capital Management. The problem with such an arrangement is that it seems very unlikely that Alloy would recommend any investment managers that do not engage in fee-sharing arrangements, which excludes many excellent and low-cost investment solutions.
At Ark Royal we use the investment firms that we think are the best solution at the lowest cost. We aren’t conflicted by using only firms that pay us a portion of their fee.
#3 High fees = less money in your pocket
According to page 5 of Alloy’s Form ADV they “charge an annual management fee, up to 1.40%. The Third-Party Investment Advisor (TPIA) maximum annual management fee is 0.35%” This doesn’t include any fund fees associated with investments of the TPIA. If your advisor is charging upwards of 1.75% - 2% that’s well above the industry average – and the higher the fees, the less you keep in your portfolio.
At Ark Royal, our advisory fee starts at 1% and the mutual funds and ETFs we recommend range from .04% to .35% - considerably less than the industry average.
#4 What does “guaranteed income” really mean?
Guaranteed income always comes with a price, so if you hear “guaranteed income” chances are the advisor is recommending an indexed annuity. An indexed annuity is one of the more lucrative products a commissioned advisor can sell. These are products with high fees, layers of complexity, hard to follow crediting schemes, and can be very costly to sell if you change your mind.
At Ark Royal, we never sell any commission products. If we mutually determine an annuity is appropriate, we work with you to find a non-commission annuity solution.
#5 Should you work with an advisor who has filed for bankruptcy?
If someone can’t manage their own financial affairs, should they be trusted to manage yours?
According to Alloy Wealth CEO Mark Henry’s Form ADV 2B he filed for bankruptcy in 2010. In addition, Henry doesn’t have a college degree or any FINRA recognized professional designations (see page 6).
At Ark Royal, all our advisors are Certified Financial Planners (CFP®) who are members of NAPFA.
If you are looking for an advisor who is ALWAYS & ONLY a fiduciary, who never is compensated by commissions we invite you to give us a call.
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