Advice that is Independent and Objective
When serving our clients, it is important that the relationships that are created and maintained are free of conflicts of interest. Here is how we make our relationships as objective as possible:
A Fee for Service Client Relationship
Zeller Kern operates on a fee for service basis for all of its planning services and investment management. We do not accept commission. All 12b-1 fees in our managed accounts are credited back to our clients. If ever there is an insurance underwriting requirement in a particular planning situation, all commissions are disclosed and donated to charity.
We aim to maximize transparency and avoid conflicts of interest as well as benefit the community.
No proprietary investment products
Proprietary products generate revenue for advisory investment firms – and therein lies the potential conflict of interest. Neither Zeller Kern, nor our broker/dealer Commonwealth Financial Network, uses any proprietary investment products such as mutual funds, annuities or insurance. Our strategies and investment products are external and evaluated objectively.
No “soft dollars” accepted
Many advisories accept “soft dollars” from mutual fund companies. We do not.
No internal conflicts
Many brokerage firms recommend their own mutual funds, have their own investment banking, and make markets in stocks and other securities. Potential conflicts arise when offerings made on the investment banking side of the business are pushed to the advisors, and then recommended to clients. Also, if a firm is heavily involved in making markets in securities, their analysts may be reluctant to be bearish or negative towards owning securities. Zeller Kern and our broker/dealer, Commonwealth, do not own any proprietary mutual funds, participate in investment banking, or participate in making a market in securities. We remain objective as a result.
A unique way of giving back to the community
During the planning process, we may recommend that a client purchase insurance, such as life or long-term care insurance to transfer risk from their financial situation. These products have commissions embedded, which by law cannot be avoided or rebated. If a client wishes that we provide them with the insurance underwriting, and a policy is produced that generates a commission, we will then disclose the amount of the commission and then donate it to a charitable cause. We retain our transparency, and the community benefits from the donation. A win-win!
Referrals from other professionals
Over the years, we have developed strong relationships with other professionals such as CPAs, attorneys, trustees, etc., and we often refer clients to them. They refer clients to us as well. We do not, however, receive compensation for these referrals.