Wealth Professional forum is the place for positive industry interaction and welcomes your professional and informed opinion.

Notify me of new replies via email
Wealth Professional | 06 Jan 2016, 08:15 AM Agree 0
With 2016 upon us and CRM2 full implementation just around the corner, advisors continue to speculate the future of embedded commissions
  • Murray Child | 06 Jan 2016, 11:28 AM Agree 0
    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.
  • david | 06 Jan 2016, 12:02 PM Agree 0
    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.
  • Brad Jardine CFP, CLU, CHfC | 06 Jan 2016, 12:03 PM Agree 0
    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.
  • Dave Watson | 06 Jan 2016, 12:41 PM Agree 0
    Great article and great perspective. It really makes me wonder why our industry is under such pressure to not be compensated for the work we do.
    If anyone has ever had the miserable experience of entering into a civil lawsuit. The legal process is arduous, expensive, and will generally drag on for a very long time. the cost of resolution and the inefficiency of the timeline make this process impractical for most people. The fees paid to the lawyers are huge and the inefficiency's of the system only profit the lawyer's. If there is a place in society that needs to be regulated and monitored it is the civil litigation system. Its designed and monitored by the people that profit from the inefficiency's. Not by the general public that turn to the system for help when they need it.
    Maybe the public interest is better there?
  • Murray Child | 06 Jan 2016, 01:36 PM Agree 0
    Wow david! Just to keep you informed I have been in the financial planning industry for over 30 years and hold both the CFP and R.F.P. (which I'm sure you don't). We engage our clients in writing for their financial and life goals and disclose all forms and methods of compensation available and what we charge. BTW 80% of my business is fee based and the maximum fee we charge is 1.0% declining to 0.60% for HNW accounts. we never use DSC or charge for switches. Before you spout off know who you are talking about. And just because you are an IA makes you no better than anybody else. There are plenty of bad apples in your community
  • Brad Jardine CFP, CLU, CHfC | 06 Jan 2016, 01:41 PM Agree 0
    I thought this forum was moderated with a reasonable level of literacy and professionalism.
  • Mike | 06 Jan 2016, 03:06 PM Agree 0
    I love how this IA, David, says that by selling mutual funds you can't be adding value. I guarantee his portfolios, risk-adjusted, have under-performed any relevant benchmark over his 30 year tenure. If stock-picking is your business model then it is a good thing you're on your way out of the industry because you wouldn't survive the next 30, let alone the next 10.
  • Brad Jardine CFP, CLU, CHfC | 07 Jan 2016, 03:17 PM Agree 0
    I wonder how the stock picking, commission generating , "story of the week" phone calls are going in the IA world lately? Oh wait I'm an IA too! Maybe I should hop on that bandwagon to make sure my grid stays sustainable. Shame David, shame.
Post a reply