‘1% fee model’ on the way out

‘1% fee model’ on the way out

  • Wealth Advisor 2015-05-19 10:34:48 AM
    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!
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  • Ken MacCoy, CHS 2015-05-19 1:07:35 PM
    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 ...now 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.
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  • Will Ashworth 2015-05-19 1:19:01 PM
    There's that word again: CHOICE. The client should have....choice. I doubt there's an advisor anywhere who doesn't feel this way.
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