“Our industry’s broken”

“Our industry’s broken”

“Our industry’s broken”

When it comes to investor awareness, Hanzelka believes education is the only answer.

“Having been on the commission model, you can sit down and explain how you are going to get paid to the client and they will not remember that the next day. There has to be much more education so clients do understand,” he says. “As we move more into the age where people are a lot more informed, most will have no issue paying the fees … but it has to be presented in the right way.”

Cherry-picking your clients isn’t turning down business, it’s proof you know yourself and what you have to offer, say some advisors.

 


read more > 1 2 3

2 Comments
  • Susan McArter 2013-11-06 10:33:30 AM
    I totally agree with this writers comments, restricting or limiting options will not work in the best interest of most of my clients. Educating clients is a large part of what I do at each meeting. Options and clear transparency is the way to proceed. If the regulators are successful with implimenting their intended changes to compensation it will drive out a large number of Financial planners and by default the big banks will become a clients only option. In my opinion this would be disasterous for all canadian investors.
    Post a reply
  • Bob T 2014-02-26 11:56:59 AM
    Unfortunately there are many people who appear unable to handle knowing what they pay. They are under the delusion that investment management should come to them at minimal or no cost.

    In 1996 I had a client who purchased on a commission basis 1,000 shares of Bank of Nova Scotia. She was so upset at seeing the commission on the transaction that she sold the shares and closed her account despite a clear discussion with her about commissions prior to her purchase. Total cost was about $40,000 and those 1,000 shares have split twice since that time and are now worth $250,000 and produce an annual dividend of just a little less than $10,000.

    The point isn't that it was a great investment but that she gave up on a great investment because she couldn't handle seeing the cost.

    On the other side I have a very analytical client who pays a fee based on the size of his account. When I informed him that some people didn't like to see a fee but would prefer to have it hidden inside as an MER in a fund he was absolutely confused. He just couldn't understand why people would rather pay more just so they didn't see it.
    Post a reply