Annuities are not inherently “good” or “bad.” They are contracts with features, costs, surrender schedules, and — critically — compensation structures that can either be crystal clear or buried under marketing. For high-net-worth households comparing advisors, the useful question is rarely “Should I buy an annuity?” It is: **If an annuity is even on the table, how is the person recommending it paid — and which pay structure costs you less over the horizon that matters?**
Martino Capital is a Colorado RIA focused on high-net-worth clients. We manage portfolios directly in-house — no TAMPs — under a single transparent AUM fee, with no product kickbacks. Our ADV-aligned, compliance-approved posture on annuities is exact:
We do not take commissions or hidden kickbacks on annuity products unless that structure benefits the client. We act as a fiduciary. If an annuity is the best fit, we compare costs. If a transparent commission costs the client less than our AUM fee, we use that — and disclose it plainly. No double-dip (not both AUM fee and product commission on the same product).
This guide is general education, not personalized insurance, investment, or tax advice. It explains how commission vs AUM math can flip — and which questions surface conflicts before you sign.
Why do people assume commissions are always worse than AUM?
Because many investors have been burned by opaque commissions: large upfront payouts, trail commissions they never saw, and “free planning” that steered toward the highest-paying shelf. That history is real. It does not prove that every commission is worse than every AUM fee.
An AUM fee is usually a recurring percentage of assets. Over five, ten, or twenty years it can dwarf a one-time, disclosed product commission — even when the product itself is identical. A transparent commission is a known dollar amount (or known schedule) disclosed up front. The fiduciary question is total client cost and clarity of incentives, not which label sounds purer in a brochure.
For vocabulary that hides that gap — fee-only, fee-based, AUM — see fee-only vs fee-based vs AUM. For where payouts hide in practice, see how to spot hidden commissions and conflicts.
What does “transparent commission vs AUM” mean in dollars (illustration only)?
Illustration only — not your numbers, not a recommendation, not advice.
Suppose a household is evaluating a product that costs the same whether it sits inside an advisory wrap or is placed with a disclosed commission. Simplified education math:
| Structure | Year 1 cost to client (education sketch) | Years 2–10 |
|---|---|---|
| Ongoing AUM on the same dollars | AUM % × assets each year | Same % compounds with assets |
| Transparent one-time commission | Disclosed commission (and product internal costs) | No advisory commission re-charge on that product if no double-dip |
| Double-dip (AUM + product commission) | Both | Both — usually the worst of both worlds |
The sketch is deliberately crude. Real contracts add M&E fees, rider charges, surrender schedules, and opportunity cost. The point for education: recurring advisory fee × years can exceed a one-time disclosed commission when the product fit is already decided. Fiduciary process compares those paths in writing — it does not pretend AUM is automatically the moral choice.
Martino Capital’s rule closes the worst failure mode: no double-dip. We do not charge an AUM fee and take a product commission on the same product.
When might an annuity even be part of a conversation?
Education-level reasons households discuss annuities with their own professionals — not a product pitch, not a buy list:
- A defined income need they want contractually framed (with full awareness of insurer credit risk and liquidity tradeoffs).
- A feature set (for example, certain guaranteed-income or living-benefit riders) that they believe fits a goal better than a pure securities portfolio — after costs.
- Tax or estate framing that their CPA/attorney has already flagged as worth comparing — again, product by product.
None of those mean “annuity first.” Often the better answer is no annuity: a diversified portfolio under a clear AUM fee, cash reserves, or another tool. Fiduciary duty starts with fit, then cost structure. Suitability channels sometimes reverse that order — product shelf first, justification second. See fiduciary duty in practice.
How should a fiduciary compare commission vs wrapping in AUM?
A durable education checklist — use it with any firm, including us:
- Is the product the right tool at all? If not, compensation math is irrelevant.
- Put both pay paths in dollars for your household size and a realistic holding period (not just percentages).
- List every cost layer — advisory AUM, commission, rider fees, fund expense ratios inside the contract, platform fees, surrender charges.
- Ask who gets paid if you say no to the product.
- Confirm no double-dip — not both ongoing AUM on that product and product commission.
- Read it in Form ADV and the illustration paperwork — not only the slide deck. Guide: how to read Form ADV Part 2A. Martino Capital filings: Part 2A on our site and IAPD / CRD 329648.
Tom’s consumer-advocate framing: if someone cannot put commission vs multi-year AUM side by side in plain English, you are not watching a cost comparison — you are watching a close.
What does Martino Capital’s annuity posture look like in practice?
- Default advisory model: single transparent AUM fee; no product kickbacks; portfolios managed in-house (no TAMP handoff).
- Annuities / insurance: We do not take commissions or hidden kickbacks on annuity products unless that structure benefits the client.
- Fiduciary standard: We act as a fiduciary. If an annuity is the best fit, we compare costs.
- Commission when cheaper/clearer: If a transparent commission costs the client less than our AUM fee, we use that — and disclose it plainly.
- No double-dip: not both AUM fee and product commission on the same product.
- Verify: Part 2A and IAPD / CRD 329648.
That is the same Client-benefit / disclose / no-double-dip rule referenced across our education cluster — including Scenario D in fiduciary duty in practice and the commission-vs-AUM section of fee-only vs fee-based vs AUM.
What red flags should you watch for before you buy?
- “Free” plan → commissionable close with no written alternatives.
- Vague answers to “What do you earn if I buy this vs if I don’t?”
- AUM wrap on a commissionable product without a clear explanation of whether both apply (double-dip risk).
- Pressure to decide before you can read the illustration, surrender schedule, and ADV conflict sections.
- Outsourced portfolio story while someone still collects a full advisory fee — ask who places trades (what is a TAMP, why we manage portfolios in-house).
- Invisible extras — revenue sharing, soft dollars, shelf incentives — mapped in soft dollars, revenue sharing, and invisible costs.
When should you call — and what are you hiring?
Call when you need a fiduciary cost-and-fit conversation, not a product seminar: a proposed annuity you do not fully understand, a fee map that mixes AUM and commissions, or a second opinion before you sign illustrations. You are hiring judgment under a fiduciary standard — including the willingness to say “no annuity” or “commission is cheaper here” when the math says so.
Phone-first: 303.771.4357 or the contact page. Email: tom@martinocapital.com. No online schedulers. Bring any illustration, the other firm’s fee one-pager, and your Form ADV questions.
For Denver metro and Colorado HNW readers comparing what “local fiduciary” should mean in practice — registration, access, in-house management, and fee clarity — see what “local fiduciary” means for Denver and Colorado high-net-worth investors.
FAQ
Is this insurance or investment advice for my situation?
No. This article is general education for Colorado / HNW readers. Annuities, securities, and tax treatment depend on your facts, contracts, and state rules. Work with your own tax, legal, insurance, and advisory professionals. Nothing here is a recommendation to buy, hold, or replace any product.
Can a fiduciary ever earn a commission on an annuity?
Yes, in limited structures — when the product fits and a transparent commission costs the client less than alternatives (including multi-year AUM), with plain disclosure. Opacity and hidden kickbacks are the problem, not the mere existence of a commission line item. See our approved wording above and fiduciary duty in practice.
What is a “double-dip”?
Charging an ongoing AUM (advisory) fee on a product and taking a product commission on that same product. Martino Capital’s posture: no double-dip.
Is fee-only always better than a commission on an annuity?
Not always. Fee-only removes product-commission incentives, but a high multi-year AUM wrap on the same dollars can cost more than a disclosed one-time commission. Compare dollars and years, not labels. Background: fee-only vs fee-based vs AUM.
How do I verify Martino Capital’s disclosures?
Read Part 2A on our site and the firm summary on IAPD / CRD 329648. Ask us to put AUM, any commission scenario, and product internal costs on one page in dollars.
How do I start a conversation?
Call 303.771.4357 or use contact-us. We are a Colorado RIA (CRD 329648) focused on HNW households that want in-house management, a clear fee map, and commissions only when that structure benefits the client — disclosed, with no double-dip.
Disclaimer: This article is general education, not personalized insurance, investment, tax, or legal advice, and not a substitute for reading a firm’s current Form ADV, product illustrations, or consulting your own counsel. It does not create an attorney-client or adviser-client relationship. It is not an offer to sell any insurance or securities product. Advisory services are offered only where Martino Capital is appropriately registered or exempt. Insurance products, where offered, are subject to licensing and product availability. Past performance does not guarantee future results. For current disclosures, see our Form ADV on IAPD.
Page reviewed September 2026 for clarity. This is educational information, not personalized investment advice.