Anna Knight, a fee-based advisor with International Capital Management, agrees with Marsh, noting that as the number of fee-based advisors increases, so too does the competition amongst them. Herein lies the risk that focus shifts away from meeting investors’ needs to business generation, alone.
“It allows for professionals in the industry to out-do each other. If I work for 1.5 per cent, then she will work for one per cent,” explains Knight. “It comes down to value proposition. Sometimes it’s hard to quantify what we do for our clients. Are we going to become like lawyers where we have to justify every single minute of work we do for our clients?”
On banks, Marsh resents financial institutions that simply say "we’re interested in fee-based business because it’s good for the client," just because it serves their own interests.
“The problem is, I think the banks' push toward fees is actually more self-interested,” he says. “There has to be actual value to the client, and if they can demonstrate that I’m all for it.”
He believes advisors, in general, should be committed to building their client`s wealth and offering the best service possible. “Whether you are a fee-based advisor or a transactional advisor, I believe that we should hold ourselves to higher standards and respect the fact that it’s not our money. And that we recognize what our specialities are.”