Fees

Unlike brokers, dually registered broker/advisers and insurance company representatives, we are fee only and do not charge sales commissions for any products or services rendered.

Financial Planning

We charge a variable fee based on the time spent on financial planning services provided.  The engagement fee is based on the complexity of your financial situation and the estimated time it will take to complete the project.  If the time required is less than the estimated time agreed upon, the fee is reduced and the fee will never be higher than the original quote.  The typical fee for a simple comprehensive plan is $1,000 while more complex plans will average from $2,000 to $3,000 depending on time and resources required. The fee will be fixed at time of engagement and is paid upon completion of the financial plan.

If you engage us for a comprehensive financial plan, pay the financial planning fee, and later decide to engage us for investment management services, we will rebate you for the financial planning fees previously paid.  This rebate is credited from the monthly investment management fees assessed on assets under management (AUM).  For example, if you pay us $1,500 for a comprehensive financial plan and a year later decide to engage us to manage your investments, we will offset the monthly portfolio management fees until the $1,500 is fully rebated.  The fee rebate does not apply to our Active Value strategy.


Cost/Fee Analysis

We charge a variable fee based on the time spent on the Cost/Fee Analysis.  The fee is based on the number of accounts and the estimated time it will take to complete the analysis.  The typical fee for a simple analysis such as a single 401k and single brokerage account analysis is $300.  The fee for multiple accounts, which may include insurance products such as annuities and whole life policies, can reach $1,000 to $1,500 depending on time and resources required.  The fee will be fixed at time of engagement so you won't pay any more than the initial engagement fee quoted.  The fee is paid upon completion of the analysis.

If you engage us for a Cost/Fee Analysis, pay us the fee, and later decide to engage us for investment management services, we will rebate you for the analysis fee previously paid.  This rebate is credited from the monthly investment management fees assessed on assets under management (AUM).  For example, if you pay us $500 for a Cost/Fee Analysis and later decide to engage us to manage your investments, we will offset the monthly portfolio management fees until the $500 is fully rebated. The fee rebate does not apply to our Active Value strategy.


Investment Management

We maintain separate accounts for our income strategies, low cost passive equity and active value strategies.  

Income Strategies: The annual fee for income management is 40 basis points (bps) or 0.40% of end of month AUM billed monthly in arrears.

Example: You open an account at Charles Schwab for SNE to provide you with monthly investment income management.  You invest $500,000 on January 16th. At the end of the month on January 31st the net asset value in the account is $500,400.  On February 1st you will be invoiced $87.74 = [($500,400 end of month AUM) x (0.40% annual management fee) x (16/365 days per year)].  On February 28th your end of month net asset value in your account is $501,000.  On March 1st you will be invoiced $153.73 = [($501,000 end of month AUM) x (0.40% annual management fee) x (28/365 days per year)].

There are no penalties or redemption fees for closing your account(s) or moving your money elsewhere.  We will bill you our monthly fee prorated for the period of time from beginning of month to day of month the account is closed.


Low Cost Passive Equity Strategies: The annual fee for low cost passive equity management is 75 basis points (bps) or 0.75% of end of month AUM billed monthly in arrears for the month.

Example: You open an account at Charles Schwab for SNE to provide you with low cost passive equity investment management.  You invest $500,000 on January 16th.  At the end of the month on January 31st the net asset value in the account is $503,000.  On February 1st you will be invoiced $165.37 = [($503,000 end of month AUM) x (0.75% annual management fee) x (16/365 days per year)]. On February 28th your end of month net asset value in your account is $505,000.  On March 1st you will be invoiced $290.54 = [($505,000 end of month AUM) x (0.75% annual management fee) x (28/365 days per year)].

There are no penalties or redemption fees for closing your account(s) or moving your money elsewhere.  We will bill you our monthly fee prorated for the period of time from beginning of month to day of month the account is closed.


Active Value: There is no time-based management fee on AUM for our active value management.  Instead we are compensated annually for our performance through an incentive fee arrangement at the end of each twelve month period following the establishment and funding of the account. Our incentive fee is 50% of dollar weighted account gains (exceeding) or losses (tempering) the gain or loss in the Vanguard S&P 500 Index fund (50% of the outperformance of the "The Index"). The annual incentive fee is subject to a high water mark in subsequent years, meaning if SNE underporforms The Index performance on a cumulative basis in prior years, we have to make it up in subsequent years before earning our incentive fee. We call this "Zero and Fifty" as opposed to the typical "Two and Twenty" charged by many hedge funds.

Example: You open an account at Interactive Brokers for SNE to provide active value investment management.  You invest $500,000 on January 1st 2020.  At the end of that year on December 31st 2020 the net asset value in the account is $580,000 and you made no deposits or withdrawals subsequent to account opening, resulting in a gross performance of 16% for the year [16% = ($580,000/$500,000)-1]. During 2020 The Index return is 13% resulting in an account balance of $565,000 had you invested in The Index instead of our value strategy.  On January 1st 2021 you will be invoiced a $7,500 incentive fee = [($580,000 - $565,000) x 50%].

On January 1st 2021 your baseline for subsequent performance on the account is the account balance of $572,500 (the account balance net of the incentive fee) = [$580,000 gross account balance - $7,500 incentive fee].  Also on January 1st 2021 your baseline for performance bench-marking is $565,000 because that is what you would have had if you had investing passively in The Index instead of investing with us in our value strategy.

During 2021 your account balance grows from $572,500 to $600,000, a gain of $27,500 or 4.8%.  However, The Index performance is 10% which would have resulted in an account balance of $621,500 = ($565,000 x 110%).  We have not earned our incentive fee for the year and you will not be invoiced.

On January 1st 2022 your baseline for subsequent performance on the account is $600,000 (the account balance) and the baseline for bench-marking is $621,500.  During 2022 the account performance loses 5% or $31,075, ending the period with $568,925.  However, the Index lost 10% or $62,150 resulting in a closing index value of $559,350.  On January 1st 2023 you will be invoiced our incentive fee of $4,787 = [($568,925 - $559,350) x 50%].

On January 1st 2023 your baseline for subsequent performance on the account is the account balance of $564,138 (the account balance net of the incentive fee) = [$568,925 gross account balance - $4,787 incentive fee].  Also on January 1st 2023 your baseline for performance bench-marking is $559,350 because that is what you would have had if you had investing passively in The Index instead of investing with us in our value strategy.

During 2023 your account balance grows from $564,138 to $640,000, a gain of $75,862 or 13.4%.  During this same period, The Index performance is 5% which would have resulted in an account balance of $587,317 = ($559,350 x 1.05%).  On January 1st 2024 you will be invoiced our incentive fee of $26,341 = [($640,000 - $587,317) x 50%].

The above example of our Active Value strategy should drive home two important points to which we would like to add a third; 1) our firm is paid purely for performance on this strategy and 2) this is a long-term investment program.  The third point we would like to add is that we do not charge any overrides on your investment portfolio because we believe that charging management fees (whether monthly, quarterly or annually) would simply raise the bar on our required performance over very long periods of time. For hedge fund managers, they are charging too much in annual management fees and active mutual fund managers are charging too much in management fees AND are managing too close to their benchmark indexes.  If we were to charge 2% annually on AUM, that would mean we would be starting from behind by 2% the first year, 4% behind the second year, 6% the third and a full 10% behind the benchmark on the fifth. And if you add in the compounding affects on any management fees taken out of your account, it represents a significant drag on long-term performance.

On the point of this strategy being a long-term one, we don't want clients in this program that are short-term oriented, or who are impatient with results, or who want to pull their money out when the markets and/or our performance drops significantly. We are very selective of who we take on as clients in this strategy.  We want to be sure that client expectations are aligned with ours, are aligned with reality and are aligned with what we have communicated regarding expectations and is understood from the onset.  

As we are incentivized to outperform the market over long periods of time, you are incentivized to keep your money committed to the investment strategy.  We have instituted a declining redemption fee schedule encouraging you to stay committed as follows:

First year
2.0%
Second year
1.5%
Third year
1.0%
Fourth year
0.5%
Fifth year
0.0%


If you decide to pull a portion or all of your money from the strategy within the first year you will be charged a 2.0% redemption fee on the amount redeemed.  On the third year the redemption fee drops to 1% and there is no redemption fee in the fifth year and beyond.  If in any year there is a year-to-date accrued incentive fee owed to us, we will invoice you for the incentive fee in addition to the redemption fee owed.


                   

Our Services

Financial Planning

Social Security Optimization

Cost/Fee Analysis

Risk Assessments

Portfolio Construction

Ongoing Monitoring


                 

Investment Strategies

Income Strategies

Low Cost Passive Equity

Active Value





                     

                Contact Us

                         SNE Investment Advisers, LLC

                         70 Perry Hill Road

                         Acushnet, MA  02743

                         1.508.341.5855

                       



The information contained in Southern New England Investment Advisers, LLCs (SNE's) website are of a general nature and is for informational purposes only and does not constitute financial, investment, tax or legal advice.  These materials reflect the opinion of SNE's Management on the date of production and are subject to change at any time without notice due to various factors, including changing market conditions, regulations or tax laws.  Where data is presented that is prepared by third parties, such information will be cited and said sources have been deemed reliable.  Any links to third party websites are offered only for use at the site visitor's own discretion.  SNE's Management is separate and unaffiliated from any third parties listed herein and is not responsible for third party product, services, policies or the content of third party websites.  All investments are subject to varying levels of risk, and there can be no assurance that the future performance of any specific investment or product referenced directly or indirectly in this website will be profitable, perform equally to any corresponding indicated historical performance levels or be suitable for the individual reader's investment needs. Past performance is not indicative of future results.

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