Sticker shock and full disclosure

Sticker shock and full disclosure

8 Comments
  • Murray Child 2016-01-06 11:28:58 AM
    You know there really is a simple solution to all the nonsense floating around from the regulators and our own advisory community.
    Simply establish maximum levels of trailers like 1% for equity funds 0.80% for balanced funds and 0.50% for fixed income. Add to this an engagement agreement that the client and advisor sign outlining the services to be provided. This should eliminate any bias that some fundcos try to project by offering ridiculous trailers of up to 1.5%. It is probably these companies, predominantly captive organizations, that Dr. Cummings is referring to.
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  • david 2016-01-06 12:02:50 PM
    Get real. You add no value to the client by selling mutual funds. I am a IA with over 30 years in the industry.

    What value are you doing for your clients. Nothing. You just sit back and recieve the trailors.

    I bet you even charge for a switch.

    Shame on you.
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  • Brad Jardine CFP, CLU, CHfC 2016-01-06 12:03:51 PM
    Mike, well-written and well said. With 30 years in the business now I've lost count how many times we've been able to save our clients many, many times our compensation. Simply factoring the myriad number of times we've advised on saving probate & legal fees, methods to finance significant purchases, twisting arms to save for a rainy day, education funding, retirement savings, debt reduction strategies, separation and divorce scenarios and costs..etc, etc. I think perhaps we're encroaching on other professionals protected fee territories and there's some underlying animosity. Nevertheless I feel very strongly that we earn our 1% (usually less) per year without question. When we factor in all costs and taxation we'll be fortunate to keep 25% of that figure. My clients will be getting our own CRM 2 document outlining the cost of doing business. If they're not happy with what they're paying they are certainly welcome to shop around or try it on their own. If our job was easy we wouldn't have one. Same for all qualified professionals.
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