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Wealth Professional | 10 Mar 2015, 09:50 AM Agree 0
A WP article from February defending the embedded compensation fee structure so enraged a Toronto advisor he just had to have his viewpoints heard. Whether he’s right or wrong is open to debate but what isn’t is his passion for the subject.
  • Bea | 10 Mar 2015, 11:12 AM Agree 0
    Think baby and bathwater. For the small investor, the embedded commission is a cheap way to get advice and for portfolio management equal to what most wealthier investors get. And because it is embedded, it is less likely to be cut when cash gets a bit tight. Mr. De Gooey is a very bright man, but I suspect it is years since he has accepted "small clients". He is absolutely correct that there are better solutions for clients reaching higher thresholds of holdings. But expecting the low-end investor to get to the level of assets Mr. De Gooey would serve without the ease of commission-included diversified funds... Don't think so: ETFs are of course cheap, but do smaller investors have the attention or understanding to pick the right one and manage them effectively? It would be helpful if people - media, investor advocates, advisors - didn't talk down a product that has helped many people and can help them going forward without providing them with reliable, easy other options. Not so easy?
  • Peter J Sintic | 10 Mar 2015, 11:22 AM Agree 0
    Please refer me John De Gooey's clients - we can get them TD and Mackenzie Funds in F class, so investors don't have to experience John De Gooey double charging them.
  • Arthur C Salzer | 10 Mar 2015, 12:56 PM Agree 0
    John, thank you for the forthright insight into the industry. Canadian investors deserve transparency and a wide range of options!
  • Murray Child | 10 Mar 2015, 01:03 PM Agree 0
    Don't encourage DeGoey to pontificate any more than he already has. For those of us who have worked with managed money for years, have fully disclosed all compensation to clients, have moved clients to lower fee options and who spend countless hours with our clients it is tiring to hear the same old stuff.
  • Ken kivenko | 10 Mar 2015, 03:26 PM Agree 0
    Mr Degoey is right on the money.
    Embedded commissions are nothing more than tied selling
    Prohibiting these sales commissions will be an important step in transforming salespersons into professional advisors.
    This will help ensure more secure retirement incomes for Canadians.Independent academic research has shown that sales commissions can and do twist recommendations and that's not counting quotas and commission grids.A Best interests standard for advice givers is the only path to professionalism.
  • Debbie Hartzman.CFP.CLU.CDFA.TEP | 11 Mar 2015, 05:46 AM Agree 0
    I find this entire discussion self serving and totally ridiculous. As a professional who has a full service planning practice that works collaboratively with other professionals I clearly see the downside of charging fees. Secondly, why do advisors and regulators feel that they have the right to label clients as idiots who don't understand or blindly make decisions. What about choice? I work under a branch that allows me the flexibility to give my clients the choice as to how they would like to work, and in my little own, non scientific study, once given the information and choice, hands down they choose the embedded fee. If you truly are servicing your client and working with them to achieve their goals, then there is no issue at all. Who says the cheapest or least expensive option is always the correct one? What about tax implications ? There are so many factors to incorporate, that fee alone is just a smoke screen for those "investment advisors" who don't really work for there clients. When the day comes that we need a time clock on our phones and emails, then the client will see the real cost of advice and I can assure you, that will leave a lot of Canadian famlies with lower costs, much lower services and much less wealth.
  • Will Ashworth | 12 Mar 2015, 11:16 AM Agree 0
    My question to all those who feel embedded compensation is "good for the small investor":
    A 1% trailer on $10,000 is $100. If a client won't pay the $100 were it to be charged separately, are they really serious about building their wealth?
  • Bea | 17 Mar 2015, 01:58 PM Agree 0
    I think so. People laugh at people who have taxes "over-deducted" from their pays, at the loonie and twoonie savers, but if it works for them, that's the right answer for them. Some people find it hard to come up with an amount at one time. The embedded commission - certainly at the $10,000 threshold, is a good deal for what you have access to. It's when there is no review as holdings grow that there may be a problem. What's good for one party isn't always good for the other.
  • Will Ashworth | 17 Mar 2015, 02:14 PM Agree 0
    Personal finance experts recommend not taking out extended warranties when buying computers, etc. The most common reason: you rarely use them making the cost extraneous.

    The same argument applies to embedded compensation.

    That's not saying there aren't a lot of good advisors working under the embedded comp model, just that there are instances where value-for-service just isn't there.
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