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Wealth Professional | 19 May 2015, 09:35 AM Agree 0
The typical fee-based model may soon be a thing of the past – that’s even as thousands of Canadian advisors move to adopt it.
  • Wealth Advisor | 19 May 2015, 10:34 AM Agree 0
    Great article Will!

    Often times the U.S. experience does not translate to Canada so I am doubtful that retainer type of business based on net worth will be mass marketed in Canada. Flat fee is however a common option offered but is not used that much... Conflicts? I think the pendulum has swung way too far in one direction. Embedded remuneration was accused of being conflicted as the populist thought is that embedded compensation will undoubtedly skew investment recommendations. Those studies aren't out yet but now AUM business models are all apparently conflicted as well. We are running out of business models!
  • Ken MacCoy, CHS | 19 May 2015, 01:07 PM Agree 0
    Interesting article Will. I tend to agree with the comments by 'Wealth Advisor' above.

    OK, lets's assume this system is implemented. Two (2) points: (1) Those clients that need the advice the most ... those with debt or just starting out with no assets or a $50 a month PAD. What do you charge them? $100 quarterly? They might not be able to afford it.

    What about those BIG money producers charging the 1% fee. Are they going to want to take that kind of a drastic income cut. I doubt it!

    I believe the client should be given the option of deciding how they wish to pay, either a fee for service &/or an embedded commission.
  • Will Ashworth | 19 May 2015, 01:19 PM Agree 0
    There's that word again: CHOICE. The client should have....choice. I doubt there's an advisor anywhere who doesn't feel this way.
  • mbf | 19 May 2015, 07:26 PM Agree 0
    The last time I dealt with a realtor, the fee was a fixed %age, yet I doubt the work for a McMansion is much more arduous than for a garden home. When it was time to see the R.E. lawyer, he too wanted a fee proportional to the value of the transaction. And lawyers who probate estates get paid fees that are based on quantum of assets distributed.
    I don't see an issue with either embedded fee (e.g. 1% for equities, 0.5% bonds, reductions on both for HNW accounts) or % of assets account fee; the bigger accounts deserve and receive more attention, and we receive higher $ fee, as do realtors and lawyers. The system is not as broken as the regulators pretend!
  • Robert Roby | 20 May 2015, 12:08 AM Agree 0
    The price of advice is only an issue in the absence of value. Value is determined by the advisor and the client and thus pricing can only be based on that discussion with the client. This whole issue of compensation is An attack on advisors by the powers that be as they obviously have little respect for the advisor community as a whole. I find it curious that a fund manager can make millions of dollars a year yet a competent advisor who provides the real value is deemed to be overpaid.
    Check out the latest Ific report on the value an advisor brings to the table .
    The last time I went to a restaurant I tipped 15 percent. My lawyer charges 400.00 per 300 per hour. A 1 percent fee on a 100k portfolio comes out to about 2 dollars per hour.

    Something to think about.

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