Not sure how much to say about fees? Check rival websites

Advisors deciding how much to disclose about their fees may want to check out the competition

Not sure how much to say about fees? Check rival websites
Fee disclosures on websites may be a critical benchmark for prospective clients to judge competing financial advisors.

In an article on Seeking Alpha, Jack Waymire argued that projecting trustworthiness is the key to avoid turning off prospects canvassing for potential advisors online, according to Financial Advisor IQ. When it comes to fee disclosures on websites, Waymire said, advisors can disclose nothing, provide some guidance on what they charge, disclose limited information, or put it all out there.

Advisors very rarely go into detail about fees, whether it’s theirs, a money manager’s, or a custodian’s, he said, because they vary depending on the type of service the client needs and what each case demands.

Nonetheless, Waymire recommended that advisors look at what’s disclosed by other advisors that prospective clients could be considering. As some advisors begin to reveal more, holding back on information will become increasingly suspicious to prospects, even if it’s done for logical reasons.

Rather than show all the details, he suggested, advisors can give some idea by stating the percentage of fees charged based on assets, or reveal that a fixed or hourly fee is charged without naming a dollar figure. Alternatively, advisors can declare a fee schedule breakdown without going into cut-off levels at which those fees change.

Whichever option an advisor chooses should be dependent on what the competition is already doing, Waymire said.

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