Advisors brace for blow to embedded comp.

Advisors brace for blow to embedded comp.

7 Comments
  • Larry Hillmer 2015-06-18 10:50:25 AM
    My solution to investment-bias-based-on-trailer is not to ban embedded trailers but to have a trailer that has been agreed to between the adviser and the client. The same process as fee-based accounts except having the fee charged at the fund level. Series A 1.5%, Series B 1.25%, Series C 1.00% etc. With the current system, the only way to "charge" a 1.25% trailer with a small client is to show them funds that pay 1.25%.
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  • Michael Gentile 2015-06-18 12:26:48 PM
    If I understand this correctly "Cumming" has concluded that imbedded compensation is the overriding factor on investment selection NOT fund performance or managerial track record, needless to say his statement at best is incredibly broad and at worst totally inaccurate.

    The other comment
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  • Mike Gentile 2015-06-18 12:41:07 PM
    If I understand this correctly, "Cumming" has concluded that imbedded compensation is the overriding factor on investment selection NOT fund performance or managerial track record. Needless to say, his statement at best is incredibly broad and at worst, totally inaccurate.

    The other comment "what on earth does running a business have to do with the question at hand?" It has a lot to do with the question. Unless I miss my guess entirely, the object of this whole exercise is to eliminate any and all imbedded compensation on the assumption that all advisors are only interested in offering funds that pay the most income regardless of performance.

    In conclusion, the dictionary definition of "business" is "the practice of making ones living by engaging in commerce" or providing services in exchange for money.

    Please let me know when that changes.
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