Compound Review: Wealth Management For High-Earners

Compound is a wealth-management fintech that helps high-income earners manage their wealth. Between investments, taxes, retirement, and estate planning, it can be increasingly difficult for executives, business owners, highly paid tech employees, and partners at law firms to stay on top of their finances. Compound aims to solve that problem, but how does it compare to other options, including robo-advisors and DIY solutions? We explain how Compound works in this full review. 

What Is Compound?

Founded as part of the 2019 Y-Combinator startup accelerator, Compound is a digital wealth management and registered investment advisor (RIA) that offers personal finance advice, tax, retirement, and estate planning to professionals. While the platform’s services originally catered to tech professionals dealing with equity compensation and complex financial matters, it has since expanded its focus. Today, Compound works with a broader range of high-earning professionals, including entrepreneurs, executives, and business owners, and oversees more than $4 billion in assets under management.  

What Does It Offer?

Compound combines traditional and digital wealth management. Here are some of the core services it offers its clients.  

Dashboard

Compound’s digital client dashboard is central to its platform. The dashboard can securely pull in your financial data from thousands of banks, investment accounts, retirement plans, credit cards, company equity, and more. This makes it easy to track your finances and net worth on a single platform, a critical feature for those with complex financial situations. The dashboard updates automatically as your balances change. 

Tax Filing 

Tax filing is one of the areas where Compound has expanded its services in recent years. It now offers integrated tax filing and planning directly on its platform, allowing clients to file their taxes without using a separate system. 

You can choose from multiple levels of support depending on your needs. DIY tax filing starts at $75, or you can choose to file with the help of a Tax Pro ($795), or opt for the done-for-you full-service option, which is priced at $1,500+. 

Investing 

Compound clients can work with advisors to build portfolios that include both public and private investment opportunities, and alternative investments such as venture capital and real estate.

Compound’s investment team is equipped to handle everything from portfolio construction to research and trading. Portfolios support tax-loss harvesting and are automatically rebalanced. Compound’s assets are typically held with well-established custodians, including Fidelity and Schwab. 

Retirement Planning

Compound’s advisors offer retirement planning services based on your long-term financial goals. They can help you project retirement income, estimate your future spending needs, and show you how your long-term goals may be impacted by different financial decisions. 

Borrowing

Compound has a network of lending partners, and can helps clients access various types of loans, including portfolio lines of credit, mortgages, and investment or startup equity-backed loans. 

Estate Planning

Compound’s advisors can help clients develop different estate planning strategies. They also work with attorneys to implement wills and trusts. Estate planning is a service that often gets overlooked, but is critical for families with significant assets, businesses, or other complex financial arrangements. 

Are There Any Fees?

We had to do some digging to determine Compound’s pricing, as it’s not prominently displayed on its website or in its FAQs, but we found it in its Client Relationship Summary PDF. Compound is a fee-for-service financial advisory company. It allows people to engage with the company on a variety of fee models. These models include:

• Fixed Fees: Standalone financial planning or consulting services range from $500 to $10,000. According to Compound, the fees are determined by the “nature and complexity of the services to be provided and the overall relationship…”
• Hourly Fees: Compound’s hourly fees for standalone financial planning or consulting services range from $100 to $500. 
• Assets under management: If you prefer to have fees taken from your assets under management, Compound charges 0.20% to 2.0%, depending on several factors. We deem 2.0% to be very expensive, but 0.20% is in line with the cost of most robo-advisors. Before joining Compound, we would deem it very important to understand what you are getting for the fees you pay, so you can determine whether it’s worth the cost. 

How Does Compound Compare?

Compound offers to help tech workers with every part of their financial life. It isn’t just a tax preparation firm, and it doesn’t offer financial plans to everyone. Instead, it is a high-cost, high-touch company that can help you navigate the aspects of financial life unique to many high-income professionals. 

Regardless of your income level, if you are fee-conscious, you may be able to find less expensive and high-quality advice by working with financial advisors from platforms like Betterment or Vanguard. 

Getting personalized financial advice often pays off in ways that you don’t expect. Not everyone needs professional financial advice, but you may be surprised by the ways you benefit.

How Do I Contact Compound? 

Compound is headquartered at 115 Broadway, 5th Floor, New York, NY. The best way to contact the company is by emailing them at access@compoundplanning.com. If you’re planning to open an account, you can also reach out through the “Get Started” button on its website. 

How Do I Start Working With Compound?

To start working with Compound, fill out the “Get Started” form on the website. It will request your name, email address, and reason for contacting Compound. 

You’ll set up a 20-minute call to better understand which fee structure makes sense for your needs.

If you commit to working with Compound, you’ll need to provide more details and documents so that Compound can help with tax planning, financial advice, or asset management. 

Is It Safe And Secure?

Compound focuses on digital privacy and security, and secures your personal and asset information to industry standards. The initial contact forms request very little information so that you can understand the approach and process before providing personal information.

If you choose to work with Compound, you can transfer files and digital assets via a secure and encrypted portal. As you probably know, there is always a risk of data breaches or attacks from malicious actors. Sharing financial information is never perfectly safe, but Compound does its best to de-risk the situation.

Is It Worth It?

While Compound’s sticker price may seem high, its prices are in line with the cost of receiving professional financial planning advice elsewhere. Remember, Compound is generally designed for people with more complex financial lives than the average investor. 

This type of client will appreciate the integration that Compound offers, as it means they don’t have to try to coordinate separate advisors for investments, taxes, and estate planning. Comound brings all of this together. 

That said, no matter how complex your finances are, you do need to determine what fees you’ll be paying and the impact they might have on your returns over the long run. For example, a 2% management fee is extremely high, even for a human advisor.