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Wealth Professional | 28 May 2015, 09:15 AM Agree 0
A veteran advisor is suggesting a way to keep embedded commissions which would remove the discretion of fund providers looking to entice players with higher compensation.
  • David Barnsdale | 28 May 2015, 11:40 AM Agree 0
    get rid of embedded trailer fees/commissions etc. Let all fees be transparent and fully disclosed and up to advisors to negotiate the fees they charge based on value they bring to the table. Interesting that this advisor doesn't want their name disclosed so that says a lot as well.
  • Lynda Weinrib | 28 May 2015, 12:10 PM Agree 0
    It is about time! BUT this must be across the board, including bank funds and segregated funds!
  • Next Generation | 28 May 2015, 12:28 PM Agree 0
    I would be interested to see this individual's ideas on fee based accounts and whether they should be capped also? How is their practice currently structured? Fee-based? I really don't see how advisors out there are getting away with charging 1.5-2.5% on 'fee-based' accounts for smaller clients holding $150,000-250,000. And this 'fee' is on all f-class funds in most cases - equities, balanced, and bond funds. As always, provided the client knows what they are paying for the advice they are receiving, I believe there shouldn't be any type of restrictions on the current embedded set up.
  • mbf | 28 May 2015, 01:41 PM Agree 0
    Brilliant proposal by veteran advisor - for years I've regretted that the Glorianne Stromberg-inspired changes to industry practices (including banning all expenses paid trips) neglected to standardize (or cap) trailer fee rates. I'm accustomed to 1% on equities, 0.5% on bond funds, but a 60/40 portfolio then pays me 0.8%, so 0.75% on balanced funds would seem fair value, whereas today's 1% is too high. And firms offering 1.25% sweeteners should indeed be capped at 1%. Hope the CSA carefully considers this proposal!
  • douglas swanson | 28 May 2015, 02:38 PM Agree 0
    Common sense. This is the best, but unfortunately the forces pushing this are not the clients but those whose fees and commissions would be enhanced by charging the what the traffic will bear scenario they are running towards.
  • robert | 29 May 2015, 01:33 PM Agree 0
    with respect to the comment about advisors getting away with 1.5-2.5 on smaller clients, may I remind you that "smaller investors" should be paying a higher amount for services that higher net worth clients have access to. In addition fee based accounts can be tax deductible for non registered accounts and include all stock and etf and fund transactions not to mention investment, retirement ,estate and tax planning.Each client needs have their own merits so blanket statements s are of no value. One idea perhaps would be to provide your client with Vanguard ETF's .The savings in MER's would more than cover your fees. Another idea, perhaps the fund co's should drop their mer's especially given their history of closet investing and illiquidity of top holdings. Another idea would be to provide your clients with individual stocks with all transaction fees covered in the fee based account or better yet a combination of all of the above.
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