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Wealth Professional | 21 Jul 2015, 09:00 AM Agree 0
The controversial head of a leading robo firm is being accused of trash talk – arguing advisors of all stripes unfairly gobble up as much as a third of client annual returns.
  • Tony Battista | 21 Jul 2015, 10:46 AM Agree 0
    I have known many investments geniuses, day traders, people with a method, people connected to someone that knows when to buy or sell etc... out of them a tiny minority have managed to make money, but the majority lost money.
    Mutual funds companies have a structure with teams of researchers and analysts and then the managers that put together the data for the decision. I guess all this does not come for free. Than there are the governments that levy taxes, and the regulators that want a lot's of explanatory papers. Than there is the profit, because in this world if you do not make a profit you are a goner.
    Us the advisors, have an infrastructure behind us that does not come for cheap (Assistants, rents, computers with programs and maintenance, office furniture and supplies, phones, permits, credits to keep the licence....)
    We gather the information, we attend strategic meetings and seminars, we meet clients, we offer a shoulder to cry on, we listen and deduct what kind of risk taker we dealing with and advise them on products. We advise on strategies on how to save money and taxes, on how to save for the children's education, on financial decisions and future adversities, and savings for the retirement. We take a client from the GIC world of 1/2% and bring him/her into a 4/6% return net of fees within a minimum volatility. Does the client care that he has been deducted an mer of 2 or 2.5%?. This Tuchman will certainly attract a crowd of followers, I do not see anything wrong with it. To each his own.
  • Will Ashworth | 21 Jul 2015, 12:00 PM Agree 0
    Good counterpoints, Tony.
  • Marie DeLauretis | 21 Jul 2015, 12:37 PM Agree 0
    De Goey's comments are much appreciated and respected!
  • Ken MacCoy, CHS | 21 Jul 2015, 01:47 PM Agree 0
    Touche' Tony! All excellent points.

    I'd suggest there is a big difference between being an actual advisor as Tony has outlined above and providing an on-line subscription service.
  • Robert Roby | 22 Jul 2015, 04:29 PM Agree 0

    Of course clients care about a fee that has been deducted especially those who have not been provided the proper transparency. Lack of transparency is one of the issues at hand and has to be dealt with accordingly.
  • kathy Waite Your Net Worth Manager | 25 Jul 2015, 03:38 PM Agree 0
    1% advisory and 1.5% management . on 500k . $12,500 !!!! Does it really take $5k for 2 meetings year even with prep and overhead? 1.5% management is using active mutual funds and all you are doing is picking them not running them ? For $5k advice you could construct a portfolio of ETFs and run an index tracking portfolio at 0.25% and save your client over $6000 a year . As DeGoey says active management is a zero sum game. When you then hit people with huge fees its a waste of their time. Clients are taking all the risk with their money and advisors / managers are guaranteed their pay. We find you can run a basic passive portfolio for $2400 a year plus ETF MER 0.2 or a more tactical strategy for $4200 . It really doesn't matter how much $ people have .We charge per family not per account or client. I think most of the industry is having a laugh at clients and CRM2 will be hilarious. if it had actually included a comparison to the benchmark that would have been the icing on the cake but people seeing how much they are gouged is a start.
    Money is about behaviour and great money managers are ( in the nicest possible way ) geeks not people people. Have a financial planner do the plan and behaviour modification $1000 a year then an investment advisor run the portfolio for 1% and ETf MErs
  • Tony Battista | 27 Jul 2015, 10:48 AM Agree 0
    Dear Robert, I do not see your big problem you seem to have with transparency. As an advisor I have always discussed the imbedded cost of a mutual fund and the additional cost of insurance on a seg fund. I also believe that most Advisors do disclose to clients the cost of the product they purchase. It looks to me that there are some self named paladins that are conducting a crusade the convert the converted.
  • Robert Roby | 27 Jul 2015, 11:57 AM Agree 0

    If that was the case CRM2 would be a non issue. Most advisors do not disclose the fees.

    Kathy do not assume that all practices offer the same services and secondly lets take a look at your etf portfolio when the markets crash. Etfs are not the answer put only a small part of the total equation. How much do you tip your table server?
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