BlackRock vs. Facet: what’s the difference?
Compare financial giants BlackRock and Facet to discover their similarities, differences, services, fees, pros, and cons to highlight the best choice for your financial needs.
Summary
BlackRock Investment Management is one of the world’s largest financial firms, with trillions of dollars in AUM.
Facet is a fee-only financial firm with over $1 billion in AUM.
Facet serves mostly individual clients rather than businesses.
BlackRock has a large institutional client base that spans 30 countries.
Facet vs. BlackRock: What’s the difference?
Founded in 2016, Facet is a fintech company that is one of the new kids on the block in financial advisory services. Its core values are bringing financial well-being to people from all walks of life and advising them on managing their money at all stages of their lives.
Facet is a registered investment advisor (RIA) with the Securities and Exchange Commission (SEC). To become a client (member, in Facet terminology), an individual consults with a sales rep who ascertains your needs. If Facet’s financial services meet your needs, you will connect with your advisor, a certified financial planner (CFP) who is also a fiduciary. Meetings are held via video chat, email, and phone, taking place a few times a year.
BlackRock is the biggest investment company in the U.S., with approximately $10.5 trillion in AUM after the first quarter of 2024. It has 70 offices across 30 countries. BlackRock serves a broad spectrum of clients, ranging from individuals with and without a high net worth to institutions like charities, pension funds, real estate investment trusts (REITs), and investment funds, amongst others.
As RIAs, BlackRock financial advisors are obliged to act as fiduciaries for their clients. However, some are licensed broker-dealers with no fiduciary requirements when acting as brokers.
What are BlackRock and Facet’s Specific Investment Strategies?
BlackRock financial advisors offer investment management and portfolio management via many different programs and accounts. They also provide some financial planning services.
BlackRock’s active strategies include fixed income, fundamental equities, alternatives, multi-asset strategies and solutions, and systematic investing. It also offers retirement planning, cash management, target date funds, and factor-based investing.
Facet offers comprehensive financial advice and investment management for every stage of life. This may include retirement planning, asset management, stock option plans, debt management, life planning, insurance planning, estate planning, planning for education, income tax strategies, and legacy planning.
What fees can I expect from BlackRock and Facet?
BlackRock is a fee-based financial firm that charges various fees depending on the type of account a client opens and the specific investment strategy chosen. There is a management fee, typically calculated as a percentage of AUM.
Clients participating in a wrap fee program also pay a comprehensive fee based on their AUM, which sometimes includes the management fee. BlackRock fees may also include hourly fees, administration fees, custodial charges, commissions, brokerage fees, transfer and registration fees, and more.
Facet fees are based on a different model. It is a fee-only financial company charging a flat annual rate, ranging between $2,000 and $6,000, depending on the services clients use. Facet fees also include a $250 enrollment fee. However, advisors may waive this fee during promotions or if you pay your annual fees upfront.
Is BlackRock or Facet Better?
Whether BlackRock or Facet financial services is a better option can be better seen by looking at each one’s pros and cons.
Pros of BlackRock
BlackRock is the world’s largest asset management firm.
As BlackRock offers a broad spectrum of investment vehicles, advisors can easily create diversified portfolios, which lessens the risk for investors.
BlackRock focuses on an asset’s long-term growth potential, making increased profits more likely due to compounding returns.
BlackRock offers user-friendly tools for clients to access and manage their investments.
Cons of BlackRock
There are fewer options for alternative investments, as BlackRock focuses more on traditional investment strategies like funds, stocks, and bonds.
BlackRock’s client base consists mainly of institutional clients, which puts the company at risk if these organizations change their investment strategies.
BlackRock has numerous disciplinary and conflict alerts listed on Form ADV.
Pros of Facet
Clients work with one Certified Financial Planner throughout their time with Facet.
Facet is a fiduciary to clients, providing advice in the client’s best interest.
There are no minimum investment requirements to become a member.
Clients can find holistic financial planning for all aspects of their lives under one roof.
Cons of Facet
The fees are not affordable for everyone.
Fees are payable in advance, and clients will not receive refunds if they cancel before the end of the term.
Because Facet fees depend on the client’s chosen strategies, identifying exact costs can be difficult.
There are no in-person consultations.
Facet or BlackRock: Which should I choose?
Deciding between Facet and BlackRock will ultimately depend on your financial objectives. However, in addition to the pros and cons, fees, and strategies, clients should ask themselves the following questions to give a clearer perspective on which financial firm would be their best option.
How do Facet and BlackRock remain competitive and adapt to changing market conditions?
Facet is planning its next growth phase by focusing on providing financial solutions to an increasing number of working-class clients, reducing the flat annual fee, and offering project-based fees for one-off financial planning consultations.
One way that BlackRock remains competitive in a rapidly evolving industry is by investing in Bitcoin mining companies. It has also shut down its robo-advisor division, FutureAdvisor, as it has a minimal profit margin and did not attract enough clients.
Which platform provides better customer service and support?
Both companies are easily reachable by email and phone. BlackRock has offices in numerous cities worldwide, where clients can consult with advisors. BlackRock’s disciplinary and conflict alerts could make clients question their reliability.
Some clients who prefer face-to-face visits may consider Facet’s customer service lacking, as they offer online-only consultations.
Can I access my Facet or BlackRock accounts through their websites and mobile apps?
BlackRock boasts the BlackRock Insights App, which is only available for institutional clients. Individuals can access their accounts via the website. Facet clients can also access their accounts via the website.
Get expert financial advice
The two firms are rather different, with BlackRock focusing more on traditional investment strategies and Facet offering a more alternative approach. Their client base, fees, and requirements are also varied, so choosing the right option will depend on an investor’s needs and circumstances.
Let Unbiased match you with the right professional SEC-regulated financial advisor who will create a tailored strategy based on what you need.
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