I wish he would push to change the Great Depression era law that started this fixed fee nonsense. There should be no fees, and certainly no fixed fee as a percentage of portfolio size— this gives NO incentive for the investment professional to earn money for their client— just find the rich and ignorant (elderly often) clients and kick back and retire early. They should ONLY get paid when they make money for their client, as before the “Great Crash”. For example, for every percent you can beat inflation and taxes, you get a fixed percentage of the net capital gains. I have yet to meet a financial advisor who would be comfortable with this, they love getting a fixed percentage of your assets regardless of how your portfolio performs; wish my job were like that.
The "fixed fee" business model for retirement plan advisors was introduced to replace the "commission" model -- where brokers were paid for each and every trade in the client's portfolio even if it was not in the client's best interest to be making any of the trades.
A fixed fee DOES give the advisor a huge incentive to manage the portfolio well. A $10 million portfolio will generate twice as much revenue for the advisor as a $5 million portfolio -- so why wouldn't he do whatever it takes to maximize the performance of the portfolio?
“There should be no fees, and certainly no fixed fee as a percentage of portfolio size— this gives NO incentive for the investment professional to earn money for their client”
This is false.
If your having ncome depends on the growth of a portfolio, you have incentive to not lose money and promote growth.
They don’t need to do anything. Nada, zilch. No requirements for fees or disclosures. Adults can decide how to best handle their money without government oversight and meddling. If you don’t like your arrangement then change it. But if I wish a flat percentage for services then I should be free to do so. If I wish to let the villag idiot manage my money I should be able to do so.
“They should ONLY get paid when they make money for their client”
Can’t a client observe the performance of his account and if he’s not happy with it, move to another so-called investment professional?
Maybe what I’m missing is that the elderly as a group are known to be more screwable by the so-called investment professionals.
btt
The IRA 401 scam is the biggest divide and conquer theft ever to fleece the employee.
Before we had purchasing power via retirement managers. Now, nothing. People have been thrown to wall street and they have had a feeding frenzy with the retirement earnings of the sheeple.