In addition, to being  a fee-only financial planner, Miklos also assists mutual fund advisors transition their mutual fund book to a portfolio manager producing regular on-going monthly referral fees.

If you are a mutual fund advisor and been in the business for decades, you may be thinking of either selling your book or ways to reduce your workload to have more free time right now. Nowadays there are a lot more costs to doing business compared to the time you started in this industry: increased regulation, higher compliance costs, continuing education requirements, more litigious clients and lower commissions and fees.

Miklos is working with portfolio managers who are interested in taking over mutual fund books, either through a referral arrangement or purchase arrangement or a combination of these two, paying the advisor a referral fee, and eventually buying your business outright if so desired. In most cases, these annual referral fees are significantly more than what you currently make net of all your costs of conducting your advisory practice. Also if you structure the referral arrangement to be essentially a purchase, the combined referral fees would be much higher than the aggregate net income and selling price you could realistically expect should you continue your business without referring/selling it to the portfolio manager.

Your referral fees would linearly grow as the total book of business, managed by the portfolio manager, grows over time. In addition the book of business on what your referral fees are calculated would also be increased by the managed assets of new clients who were referred to the portfolio manager by your clients. By doing this transition, you may still want to be involved as a fee-only financial planner or market the services of the portfolio manager to whom you referred your clients.

Normally portfolio managers are interested in this type of arrangement if all the below requirements are met (or at least most of them):

• Minimum Mutual Fund Book Size: $20 million
• Maximum percentage of DSC funds within your book: 35%
• Maximum current percentage of DSC sales of total sales: 40%
• Minimum average asset size per household: $200,000
• Minimum median asset size per household: $150,000

If you are interested in exploring this opportunity, please contact Miklos by e-mail. He will send you projected referral fee scenarios based on clear assumptions and also provide you projected referral fees tailored to your particular situation.

Please e-mail Miklos at nagy@fin-plan.ca to explore a way to raise your income, work less and enjoy more free time.