Comments on: Fee-Only versus Fee-Based… Continued http://wheredoesallmymoneygo.com/fee-only-versus-fee-based-continued/ A personal finance blog written by Preet Banerjee Wed, 23 May 2012 05:38:46 +0000 hourly 1 http://wordpress.org/?v=3.1.2 By: Gordon Stockman http://wheredoesallmymoneygo.com/fee-only-versus-fee-based-continued/#comment-2992 Gordon Stockman Thu, 24 Dec 2009 18:14:29 +0000 http://www.wheredoesallmymoneygo.com/?p=1029#comment-2992 Am I a fee only advisor? Under some definitions I am not. Regardless of how the fee is calculated though, what I am is unbiased on investment selection because I do not sell them. Being unlicensed, I do not work for a product machine, which would be required if I wished to be licensed (If we are looking for better industry terms, I would certainly like a substitute for "UN-licensed"). The important issues are that I work for my clients at a PRE-AGREED rate and I am uninfluenced by a master that wishes to dictate product choice. Objectivity and unbiased advice are the goals. The fee makes it possible for me to stay in business and provide this alternative, however calculated. A good example of this untied objectivity is I often advise clients that have outgrown mutual funds (and you do out grow them) to then move to an alternative strategy. No mutual fund company nor rep has a system to move clients up as they grow, because the rep would lose the income from that client and cannot follow the client into the new space because of licensing. I organize that move up for them. THat is objectivity that is possible because my remuneration is unaffected. Now back to the question, "Am I a fee only advisor? I ask my clients to choose, between a one off plan ($3000 for Retire, Tax, Invest and Estate)or per hour at $160 minimum OR an ongoing relationship of $90 per couple per month BUT for monthly they MUST go to an acceptable (by me) broker, mutual fund rep or ICPM, that charges a percent of assets. Why? because a plan is worthless unless the implementing investment agent will follow the plan. I also do very few one off plans. It does not encourage the clients to make financial planning a ongoing excercise and seek advice at all changes during their life. It ignores the need for constant questioning and reassurance. Gord Am I a fee only advisor? Under some definitions I am not. Regardless of how the fee is calculated though, what I am is unbiased on investment selection because I do not sell them. Being unlicensed, I do not work for a product machine, which would be required if I wished to be licensed (If we are looking for better industry terms, I would certainly like a substitute for “UN-licensed”). The important issues are that I work for my clients at a PRE-AGREED rate and I am uninfluenced by a master that wishes to dictate product choice. Objectivity and unbiased advice are the goals. The fee makes it possible for me to stay in business and provide this alternative, however calculated. A good example of this untied objectivity is I often advise clients that have outgrown mutual funds (and you do out grow them) to then move to an alternative strategy. No mutual fund company nor rep has a system to move clients up as they grow, because the rep would lose the income from that client and cannot follow the client into the new space because of licensing. I organize that move up for them. THat is objectivity that is possible because my remuneration is unaffected. Now back to the question, “Am I a fee only advisor? I ask my clients to choose, between a one off plan ($3000 for Retire, Tax, Invest and Estate)or per hour at $160 minimum OR an ongoing relationship of $90 per couple per month BUT for monthly they MUST go to an acceptable (by me) broker, mutual fund rep or ICPM, that charges a percent of assets. Why? because a plan is worthless unless the implementing investment agent will follow the plan. I also do very few one off plans. It does not encourage the clients to make financial planning a ongoing excercise and seek advice at all changes during their life. It ignores the need for constant questioning and reassurance.

Gord

]]> By: This and That: Hunters becoming the hunted edition http://wheredoesallmymoneygo.com/fee-only-versus-fee-based-continued/#comment-2991 This and That: Hunters becoming the hunted edition Fri, 27 Feb 2009 04:38:35 +0000 http://www.wheredoesallmymoneygo.com/?p=1029#comment-2991 [...] Preet continues the discussion on fee-only versus fee-based. [...] [...] Preet continues the discussion on fee-only versus fee-based. [...]

]]> By: Weekly review February 14th- 20th | Financial Highway http://wheredoesallmymoneygo.com/fee-only-versus-fee-based-continued/#comment-2990 Weekly review February 14th- 20th | Financial Highway Sat, 21 Feb 2009 22:54:38 +0000 http://www.wheredoesallmymoneygo.com/?p=1029#comment-2990 [...] Where Does All My Money Go does a quick review of fee-only vs fee-based Advisors [...] [...] Where Does All My Money Go does a quick review of fee-only vs fee-based Advisors [...]

]]> By: Ink-Stained Gorilla http://wheredoesallmymoneygo.com/fee-only-versus-fee-based-continued/#comment-2989 Ink-Stained Gorilla Wed, 18 Feb 2009 16:16:30 +0000 http://www.wheredoesallmymoneygo.com/?p=1029#comment-2989 The question is what is the financial advice worth? I know great advisors that each use the various different fee-structures. The common thread is they inform their client about how they are compensated and deliver great advice in return. The fee-structure is not a key determinant about the competency of an advisor. There are good advisors who will use deferred sales charges on mutual funds. The reason being it adequately compensates them to provide advice for less-affluent clients. I don't see a problem with that if the client understands what they are paying and what services they are getting in return. I've also seen an advisory firms charge 1.8% to put their clients in a portfolio of buy and hold ETFs. The question is what is the financial advice worth? I know great advisors that each use the various different fee-structures.

The common thread is they inform their client about how they are compensated and deliver great advice in return.

The fee-structure is not a key determinant about the competency of an advisor. There are good advisors who will use deferred sales charges on mutual funds. The reason being it adequately compensates them to provide advice for less-affluent clients.

I don’t see a problem with that if the client understands what they are paying and what services they are getting in return.

I’ve also seen an advisory firms charge 1.8% to put their clients in a portfolio of buy and hold ETFs.

]]> By: Thicken My Wallet http://wheredoesallmymoneygo.com/fee-only-versus-fee-based-continued/#comment-2988 Thicken My Wallet Wed, 18 Feb 2009 14:45:20 +0000 http://www.wheredoesallmymoneygo.com/?p=1029#comment-2988 Wow, the financial industry pulling a bait and switch? I am stunned! Slightly off point but the industry really should be regulated better to differentiate between financial ADVISORS and financial salespeople. Wow, the financial industry pulling a bait and switch? I am stunned!

Slightly off point but the industry really should be regulated better to differentiate between financial ADVISORS and financial salespeople.

]]> By: David Phipps http://wheredoesallmymoneygo.com/fee-only-versus-fee-based-continued/#comment-2987 David Phipps Wed, 18 Feb 2009 12:19:45 +0000 http://www.wheredoesallmymoneygo.com/?p=1029#comment-2987 Here is a point that often gets overlooked regarding hourly versus percentage of asset fees. Consider a fee-only advisor who is paid an annual fee of a $1,000 versus another advisor who gets 1% of assets on a $100,000 portfolio - who do you think sweats more to make sure those assets grow? Here is a point that often gets overlooked regarding hourly versus percentage of asset fees. Consider a fee-only advisor who is paid an annual fee of a $1,000 versus another advisor who gets 1% of assets on a $100,000 portfolio – who do you think sweats more to make sure those assets grow?

]]> By: Fee-Only Based on Net Worth, not Portfolio Size : WhereDoesAllMyMoneyGo.com http://wheredoesallmymoneygo.com/fee-only-versus-fee-based-continued/#comment-2986 Fee-Only Based on Net Worth, not Portfolio Size : WhereDoesAllMyMoneyGo.com Wed, 18 Feb 2009 00:11:53 +0000 http://www.wheredoesallmymoneygo.com/?p=1029#comment-2986 [...] can see that the recent posts on fee-based versus fee-only are generating some comments (both on this blog and on Jonathan Chevreau’s). Just to add a little spice to the mix: did you know that some [...] [...] can see that the recent posts on fee-based versus fee-only are generating some comments (both on this blog and on Jonathan Chevreau’s). Just to add a little spice to the mix: did you know that some [...]

]]> By: Michael James http://wheredoesallmymoneygo.com/fee-only-versus-fee-based-continued/#comment-2985 Michael James Tue, 17 Feb 2009 22:01:59 +0000 http://www.wheredoesallmymoneygo.com/?p=1029#comment-2985 Financial Advisor: Based on my limited experience in talking to owners of mutual funds, at least half of them aren't even aware that they pay their financial advisor. This makes it meaningless to talk about what form of fee they WANT to pay. Financial Advisor: Based on my limited experience in talking to owners of mutual funds, at least half of them aren’t even aware that they pay their financial advisor. This makes it meaningless to talk about what form of fee they WANT to pay.

]]> By: financial advisor http://wheredoesallmymoneygo.com/fee-only-versus-fee-based-continued/#comment-2984 financial advisor Tue, 17 Feb 2009 21:37:06 +0000 http://www.wheredoesallmymoneygo.com/?p=1029#comment-2984 There is also the issue of client choice- many clients WANT to pay commissions for a simple, buy and hold strategy, the same way that some clients WANT to pay and asset-based fee and some WANT to pay a flat planning fee. There is also the issue of client choice- many clients WANT to pay commissions for a simple, buy and hold strategy, the same way that some clients WANT to pay and asset-based fee and some WANT to pay a flat planning fee.

]]> By: Fee-Only versus Fee-Based… Continued | No Brainer Profits http://wheredoesallmymoneygo.com/fee-only-versus-fee-based-continued/#comment-2983 Fee-Only versus Fee-Based… Continued | No Brainer Profits Tue, 17 Feb 2009 19:49:43 +0000 http://www.wheredoesallmymoneygo.com/?p=1029#comment-2983 [...] Read the original: Fee-Only versus Fee-Based… Continued [...] [...] Read the original: Fee-Only versus Fee-Based… Continued [...]

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