Advisory Fees. Bend over!

What firm will be receiving the ACAT?

over 2%…nice. now that is a wrapper

Wow, talk about getting...uhhhhhhh, taken!

It would surprise me if this client's investment is more than what he/she started with. (I'm guessing they started with $100,000.)

I figure annual fees of about 2.5% per year (including estimated annual MF charges). Add to that, front-end loads and you've got enough to make lease payments on a 5-series Beemer for 12 months. After that, switch'em to another A-share fund, renew your lease, and drive happy......all the way to arbitration!

Babbs and Newbie--

I had a similar situation that I ran across.  I sent the ACAT to an out of state broker working as an independent under the AIG nameplate.  There had been no activity in the account (buys, sells, re-balances, re-allocations, money added, money taken out) in more than two years.

I came across a B share acct that had a 1.5% wrapper on it.

Brilliant .

Looney- First of all, your posts are generally excellent.

I think you are taking this situation a bit too seriously.  The fee-based account avoided the A-share load, and hopefully the advisor put them in good funds.  Granted, 2.25% to buy/hold funds seem quite excessive.  I generally charge around 1%, depending on the amount.  In fact, I've brought in accounts, filled their portfolios with A-share funds, and cancelled the "fee" after a year, as I can't stomach taking ongoing payment in this situation.  Still, they were well served by me in the interim, and avoided the 4-5% loads.

Dude- don't be too quick to bash B-shares w/ a wrapper.  Likely, the account was transferred in, and the broker while not wanting the client to incure 3-5% back-end loads wanted to get paid for the advice & servicing the account.  IMO nothing unethical about that.  Better that than selling all the B shares and putting eveything an an annuity to "defer taxes" whil we all know that is done to collect a big $$ w/out causing a switch letter.

The account I am referencing charged the load and then a wrap.  To be fair, they hit a significant and meaningful breakpoint, but still a double whammy. 

[quote=The Judge]

Looney- First of all, your posts are generally excellent.

I think you are taking this situation a bit too seriously.  The fee-based account avoided the A-share load, and hopefully the advisor put them in good funds.  Granted, 2.25% to buy/hold funds seem quite excessive.  I generally charge around 1%, depending on the amount.  In fact, I've brought in accounts, filled their portfolios with A-share funds, and cancelled the "fee" after a year, as I can't stomach taking ongoing payment in this situation.  Still, they were well served by me in the interim, and avoided the 4-5% loads.

Dude- don't be too quick to bash B-shares w/ a wrapper.  Likely, the account was transferred in, and the broker while not wanting the client to incure 3-5% back-end loads wanted to get paid for the advice & servicing the account.  IMO nothing unethical about that.  Better that than selling all the B shares and putting eveything an an annuity to "defer taxes" whil we all know that is done to collect a big $$ w/out causing a switch letter.

[/quote]

Nope.......client bought the mutual funds from the broker.

Dude- Obviously; you can’t buy B-shares in a fee-based account. So what you’re saying is the broker bought B-shares, THEN convinced the client to pay an annual fee?  What a scumbag…

[quote=The Judge]

Looney- First of all, your posts are generally excellent.

I think you are taking this situation a bit too seriously.  The fee-based account avoided the A-share load, and hopefully the advisor put them in good funds.  Granted, 2.25% to buy/hold funds seem quite excessive.  I generally charge around 1%, depending on the amount.  In fact, I've brought in accounts, filled their portfolios with A-share funds, and cancelled the "fee" after a year, as I can't stomach taking ongoing payment in this situation.  Still, they were well served by me in the interim, and avoided the 4-5% loads.

Dude- don't be too quick to bash B-shares w/ a wrapper.  Likely, the account was transferred in, and the broker while not wanting the client to incure 3-5% back-end loads wanted to get paid for the advice & servicing the account.  IMO nothing unethical about that.  Better that than selling all the B shares and putting eveything an an annuity to "defer taxes" whil we all know that is done to collect a big $$ w/out causing a switch letter.

[/quote]

Please explain how do you avoid a load by buying A shares? You can't.  If they were to avoid a load they would be R shares or no loads in the account.  No.... what they did was charge the client to buy the A shares when they rolled out of a qualified plan, and then transferred them into a advisory account at a later date. 

Nice.

not true, most wrap programs allow you to buy a-shares and no-loads @ nav, no conflict of interest there.

BL- It depends on the family of funds, but w/ most wrap accounts you purchase A shares at NAV.  The broker doesn’t receive the 25 bps trail, in addition to the flat fee being charged.  I know American Funds uses Class F shares, but many still use class A.

BL- I just put money into A- shres in a fee based account. Bought @NAV because no f-shares available. That is how you avoid paying a sales load on A shares.

BTW, some wrap programs allow you to keep the 12b-1 or refund it back to the customer. 1% would only be .75% to the client if rebated, a very good selling point.

Thanks…my mistake.   I had only heard of R shares.  Obviously I am not fee based…yet.

[quote=babbling looney] Thanks...my mistake.   I had only heard of R shares.  Obviously I am not fee based.......yet.[/quote]

...just goes to show even the best among us aren't infallable...

BL, you'll love fee-based when you get there...it's amazing what's available to your clients...I'm just starting to introduce managed futures to my fee-based clients...an interesting, non-corrolated diversification tool...

[quote=Indyone]

[quote=babbling looney] Thanks...my mistake.   I had only heard of R shares.  Obviously I am not fee based.......yet.[/quote]

...just goes to show even the best among us aren't infallable...

BL, you'll love fee-based when you get there...it's amazing what's available to your clients...I'm just starting to introduce managed futures to my fee-based clients...an interesting, non-corrolated diversification tool...

[/quote]

I am looking forward to being able to offer fee based accounts, however, am still wondering how many of my clients would be suitable for this.  Just guessing that only 30% of my base would switch.  I do think that I would be able to pull in some more active accounts and younger clients with this strategy. 

I like the idea of being able to better control my clients portfolios by offering some of the excellent no load funds available, strategies like you have mentioned and being able to make changes in the porftoio without the clients suspecting that I am just trying to make a commission.

Since I have some other things on my plate right now, I don't think I will sit for the exam until later this year.  So then.....we shall see. 

[quote=babbling looney][quote=Indyone]

[quote=babbling looney] Thanks...my mistake.   I had only heard of R shares.  Obviously I am not fee based.......yet.[/quote]

...just goes to show even the best among us aren't infallable...

BL, you'll love fee-based when you get there...it's amazing what's available to your clients...I'm just starting to introduce managed futures to my fee-based clients...an interesting, non-corrolated diversification tool...

[/quote]

I am looking forward to being able to offer fee based accounts, however, am still wondering how many of my clients would be suitable for this.  Just guessing that only 30% of my base would switch.  I do think that I would be able to pull in some more active accounts and younger clients with this strategy. 

I like the idea of being able to better control my clients portfolios by offering some of the excellent no load funds available, strategies like you have mentioned and being able to make changes in the porftoio without the clients suspecting that I am just trying to make a commission.

Since I have some other things on my plate right now, I don't think I will sit for the exam until later this year.  So then.....we shall see. 

[/quote]

I'm sorry you've given your clients a reason to suspect that you're just trying to earn a commission. You should put them in an asset based fee account, so they can think your trying to make money off of them every second of every day, in perpetuity.

I work for Bank of America and we have a fundstratiges program that charges 1.5 % on the first 250k. We do select the funds for the model portfolio every qtr and change if needed. and rebal every qtr. With the mangt expense of the funds it is about 2.40% total. This is one of the fee based programs that managment push. I am looking at LPL and Wachovia. What fee based programs do they have and what would you guys suggest? What fee structure is most fair? Thoughts?

[quote=The Judge]Dude- Obviously; you can't buy B-shares in a fee-based account. So what you're saying is the broker bought B-shares, THEN convinced the client to pay an annual fee?  What a scumbag.....[/quote]

Exactly.  It was so outrageous that I actually laughed at the genius of it.....The client sees no upfront charge, broker gets a big upfront payout that has no breakpoints and a nice .25 bps plus 1.5% to boot.  Scumbag is a generous title for this maggot a*s munch.

I should also note that the broker was an independent who was billing the fee as a seperate invoice (I assume to get around some compliance issue).  It was a really odd scam he had going.

You know I see this all the time from other reps trying to bash me being fee based. If I am charging 1-1.5% and the client happens to have some A share funds in the portfolio, the other rep assumes they paid a fee. Of course the fact we bought them within the fee based account allowed us to buy the funds with no cost. (Again, assumed we cant buy another lower cost share).Then if there is a 12b-1 fee that is then refunded to the client to lower the fee.

Anyway I usually take that as a sign the rep is new and doesnt know what they are talking about...Or, well nevermind I was going to say they are at Ed Jones. But we wont get into that.

Now the fact the above rep is separate billing brings this arguement to an entire different plane. Yes they are undoubtably trying to screw the client. Of course I guess the client could have asked for separate billing on the account, I have some who do for tax reasons.

Wow this is such a long arguement I wont even go any further.

I was not aware you could buy A shares in wrap accounts. At our firm, you buy the shares at NAV.

If someone wanted advice or annual rebalancing of a GROUP of mutual funds, I can see the logic of holding them in a fee based account.

I think Babbling has the facts wrong.

I think Babbling has the facts wrong.

No, my facts are right.  And guess what... I can read a statement showing a portfolio of nothing but A share mutual funds all in the same fund family.  I met with my client yesterday.  The RIA is charging the client a quarterly fee of approximately $500 per quarter based on the account value at the end of the previous quarter.  Total charged last year was over $2000.  They evidently are doing a re-balancing act and shuffle the funds within the same fund family periodically without any consultation (discretionary) to the client to give the impression that they are earning this exorbitant fee. 

I asked if he knew if he had paid a load on these funds or not and of course he couldn't remember as this was a rollover of qualified funds from a previous employer years ago.  It is possible that he did not.  HOWEVER a 2% fee for doing nothing but re-balancing a mutual fund portfolio of the same fund family is just a tad over the top.  A fee of .5% annually would be a more reasonable amount.

As to whether he has been reimbursed the 12b-1 fees, it seems unlikely as the client reports to me that they have never seen any statement to that fact.   Of course they have been getting hosed for years without any complaint so possibly they have been reimbursed.  This is just one smaller account that they have and obviously......they haven't been paying attention.

It is all moot anyway, as we are going to ACAT this account as well as two other accounts and another qualifed rollover in in a few days.

Don't get me wrong. I think fee based accounts are a good way to go when appropriate and I am looking forward to being able to offer this service in my practice.  It is just that cases like this leave a bad taste and make us all look bad.

If someone can justify charging 2% (even with reimbursing the 12b-1 fees) on a portfolio of mutual funds all with the same fund family.....I would like to hear just why you think you are worth that.

[quote=babbling looney]

If someone can justify charging 2% (even with reimbursing the 12b-1 fees) on a portfolio of mutual funds all with the same fund family.....I would like to hear just why you think you are worth that.

[/quote]

As much as I dislike these things, and think the rate being quoted is the very top end, I don't think it's that much of a stretch to see how charging 2%, giving back, say .75 bps in 12b-1 charges and avoiding even a breakpoint reduced front load is fair.

[quote=babbling looney]

If someone can justify charging 2% (even with reimbursing the 12b-1 fees) on a portfolio of mutual funds all with the same fund family.....I would like to hear just why you think you are worth that.

[/quote]

Several reasons you'll hear if you ask that question:

1.  Because the customer doesn't understand.

2.  Because the customer is going to be screwed by somebody, so it might as well be me

3.  Because I passed the Series 7 exam and am a professional

4.  Because if it was wrong there would be laws against it, and there are not

5.  Because I have a new child and my wife quit her job

I grow weary--but you're just trying to be all moral and stuff.  You have to remember that the role of a financial advisor is to convert customer assets to fees and commissions as quickly as possible.

[quote=babbling looney]As to whether he has been reimbursed the 12b-1 fees, it seems unlikely as the client reports to me that they have never seen any statement to that fact.   Of course they have been getting hosed for years without any complaint so possibly they have been reimbursed.  This is just one smaller account that they have and obviously…they haven’t been paying attention.

It is all moot anyway, as we are going to ACAT this account as well as two other accounts and another qualifed rollover in in a few days.

Don't get me wrong. I think fee based accounts are a good way to go when appropriate and I am looking forward to being able to offer this service in my practice.  It is just that cases like this leave a bad taste and make us all look bad.

If someone can justify charging 2% (even with reimbursing the 12b-1 fees) on a portfolio of mutual funds all with the same fund family.....I would like to hear just why you think you are worth that.[/quote]

Babs, as I understand it, an advisor CANNOT receive 12b-1 fees on an advisory retirement account, at least not at my B/D, and I'm under the impression tha it is an ERISA issue...not a firm policy.  LPL has a default net of 12b-1 fees against the fee I charge, i.e., if I charge 1% and the funds have a 0.25% 12b-1 fee, the client sees a net charge of 0.75%.  If this happened in this account, the charges are probably net of the actual advisory fee, which makes it look even more expensive in my eyes.

Also, as greedy as this advisor sounds (some may argue this point, but I think it's a little pricey), I have a hard time believing that the client did not get these A shares at NAV...I cannot imagine a compliance department allowing such a double-dip, although I'll allow anything is possible...or perhaps I should say that anything WAS possible...

What does “greedy” mean in the sentence, “As greedy as the advisor sounds…?”

I simply feel that charging well in excess of 2% for managing a group of mutual funds from the same family is a bit greedy...just my opinion

[quote=Indyone]

I simply feel that charging well in excess of 2% for managing a group of mutual funds from the same family is a bit greedy...just my opinion

[/quote]

Greedy is a word that cannot be defined--do you think the guy who is charging that would consider himself greedy?

I think that calling him aggressive would be more appropriate.

Until you get to a fee of zero you always run the chance of somebody calling you greedy.

I’m sorry you people aren’t worth 2% per year. Just because YOU aren’t worth it, doesn’t mean that others aren’t worth it. I know lots of people who charge at least 2% and a friend of mine charges some people up to 2.8%.

Personally, I don't like asset-based fees. I like upfront commissions. I steal a lot of accounts from people who charge fees by telling people that the first thing I"m gonna do is turn off the broker meter. They LOVE the sound of that!

Those of you who are not in the business, but are just reading this stuff.

Sooner or later Knucklehead will lose his license.  Sociopaths such as him are relatively common in the business, but the regulators catch up with them sooner or later.

What is sad is the damage they do to the rest of us--anybody who encounters his type, or knows somebody who did gets so turned off that they won't trust anybody.

Our buddy Philo is another sociopath.  As I said there are a lot of them around--sort of like rats in the NYC subways.

[quote=NASD Newbie]

Those of you who are not in the business, but are just reading this stuff.

Sooner or later Knucklehead will lose his license.  Sociopaths such as him are relatively common in the business, but the regulators catch up with them sooner or later.

What is sad is the damage they do to the rest of us--anybody who encounters his type, or knows somebody who did gets so turned off that they won't trust anybody.

Our buddy Philo is another sociopath.  As I said there are a lot of them around--sort of like rats in the NYC subways.

[/quote]

THat was funny.

[quote=Indyone]  LPL has a default net of 12b-1 fees against the fee I charge, i.e., if I charge 1% and the funds have a 0.25% 12b-1 fee, the client sees a net charge of 0.75%.  If this happened in this account, the charges are probably net of the actual advisory fee, which makes it look even more expensive in my eyes.[/quote]

That's interesting. With our system the client would see the gross fee, and 12b-1 rebates stand as a separate issue.

[quote=knucklehead]

Personally, I don't like asset-based fees. I like upfront commissions. I steal a lot of accounts from people who charge fees by telling people that the first thing I"m gonna do is turn off the broker meter. They LOVE the sound of that!

[/quote]

No doubt that leaves them with the incorrect impression they'll no longer be paying fees.....

[quote=mikebutler222][quote=knucklehead]

Personally, I don't like asset-based fees. I like upfront commissions. I steal a lot of accounts from people who charge fees by telling people that the first thing I"m gonna do is turn off the broker meter. They LOVE the sound of that!

[/quote]

No doubt that leaves them with the incorrect impression they'll no longer be paying fees.....

[/quote]

It works like a charm.

[quote=knucklehead][quote=mikebutler222][quote=knucklehead]

Personally, I don't like asset-based fees. I like upfront commissions. I steal a lot of accounts from people who charge fees by telling people that the first thing I"m gonna do is turn off the broker meter. They LOVE the sound of that!

[/quote]

No doubt that leaves them with the incorrect impression they'll no longer be paying fees.....

[/quote]

It works like a charm.

[/quote]

And you're happy to mislead them. Make sure you have that resume ready for your next career....

[quote=NASD Newbie]

Those of you who are not in the business, but are just reading this stuff.

Sooner or later Knucklehead will lose his license.  Sociopaths such as him are relatively common in the business, but the regulators catch up with them sooner or later.

What is sad is the damage they do to the rest of us--anybody who encounters his type, or knows somebody who did gets so turned off that they won't trust anybody.

Our buddy Philo is another sociopath.  As I said there are a lot of them around--sort of like rats in the NYC subways.

[/quote]

Getting a bit paranoid, aren't we Putsy?  I thought Knucklehead and I were the same person.  No, wait...Starka and I are the same person...no, wait...Starka is one of the moderators...no, wait...everyone who shows you up for what you are is a sociopath...or a rat in the subway.

As has been pointed out before...when yo're cornered in one of your foolish statements, you naturally resort to ad hominem attacks. 

You're losing it, my boy.  Go take your meds.

[quote=Philo Kvetch][quote=NASD Newbie]

Those of you who are not in the business, but are just reading this stuff.

Sooner or later Knucklehead will lose his license.  Sociopaths such as him are relatively common in the business, but the regulators catch up with them sooner or later.

What is sad is the damage they do to the rest of us--anybody who encounters his type, or knows somebody who did gets so turned off that they won't trust anybody.

Our buddy Philo is another sociopath.  As I said there are a lot of them around--sort of like rats in the NYC subways.

[/quote]

Getting a bit paranoid, aren't we Putsy?  I thought Knucklehead and I were the same person.  No, wait...Starka and I are the same person...no, wait...Starka is one of the moderators...no, wait...everyone who shows you up for what you are is a sociopath...or a rat in the subway.

As has been pointed out before...when yo're cornered in one of your foolish statements, you naturally resort to ad hominem attacks. 

You're losing it, my boy.  Go take your meds.

[quote=Indyone]  LPL has a default net of 12b-1 fees against the fee I charge, i.e., if I charge 1% and the funds have a 0.25% 12b-1 fee, the client sees a net charge of 0.75%.  If this happened in this account, the charges are probably net of the actual advisory fee, which makes it look even more expensive in my eyes.

That's interesting. With our system the client would see the gross fee, and 12b-1 rebates stand as a separate issue.[/quote]

Yeah...I was combing through the statement detail looking for it and then it finally dawned on me that the client's fee was considerably less than it should have been.  It was a learning experience for me.  To be honest, I'd rather see it as a line item as I believe the client would appreciate it more...

[quote=mikebutler222][quote=knucklehead][quote=mikebutler222][quote=knucklehead]

Personally, I don't like asset-based fees. I like upfront commissions. I steal a lot of accounts from people who charge fees by telling people that the first thing I"m gonna do is turn off the broker meter. They LOVE the sound of that!

[/quote]

No doubt that leaves them with the incorrect impression they'll no longer be paying fees.....

[/quote]

It works like a charm.

[/quote]

And you're happy to mislead them. Make sure you have that resume ready for your next career....

[/quote]

What's the matter? Do you work at Morgan Stanley and charge fees?

[quote=knucklehead][quote=mikebutler222][quote=knucklehead][quote=mikebutler222][quote=knucklehead]

Personally, I don't like asset-based fees. I like upfront commissions. I steal a lot of accounts from people who charge fees by telling people that the first thing I"m gonna do is turn off the broker meter. They LOVE the sound of that!

[/quote]

No doubt that leaves them with the incorrect impression they'll no longer be paying fees.....

[/quote]

It works like a charm.

[/quote]

And you're happy to mislead them. Make sure you have that resume ready for your next career....

[/quote]

What's the matter?

[/quote]

You mean besides your intentional, and gleeful misleading of clients? Nothing. Good luck with that in the long term, and keep that resume handy.

[quote=knucklehead]

Do you work at Morgan Stanley and charge fees?

[/quote]

Yes, and yes, when the client prefers. Then again, neither of those two things have anything to do with your lack of ethics, which was the issue.

[quote=mikebutler222][quote=knucklehead][quote=mikebutler222][quote=knucklehead][quote=mikebutler222][quote=knucklehead]

Personally, I don't like asset-based fees. I like upfront commissions. I steal a lot of accounts from people who charge fees by telling people that the first thing I"m gonna do is turn off the broker meter. They LOVE the sound of that!

[/quote]

No doubt that leaves them with the incorrect impression they'll no longer be paying fees.....

[/quote]

It works like a charm.

[/quote]

And you're happy to mislead them. Make sure you have that resume ready for your next career....

[/quote]

What's the matter?

[/quote]

You mean besides your intentional, and gleeful misleading of clients? Nothing. Good luck with that in the long term, and keep that resume handy.

[quote=knucklehead]

Do you work at Morgan Stanley and charge fees?

[/quote]

Yes, and yes, when the client prefers. Then again, neither of those two things have anything to do with your lack of ethics, which was the issue.

[/quote]

You don't get it...I'm IN the long-term. This is it! If YOUR firm didn't haircut annuities down to 4% and then pay you 35%, you'd like them too. If I put in $100,000 I make 7%*90%= $6,750. If YOU do it, you make 4%*35% = $1400.

It's no wonder YOU hate annuities. I think you're very unethical because you won't sell them to your clients because YOU don't make enough money off of them.

Don't you just hate it when the truth gets out and you get exposed for what you really are?

[quote=knucklehead][quote=mikebutler222][quote=knucklehead][quote=mikebutler222][quote=knucklehead][quote=mikebutler222][quote=knucklehead]

Personally, I don't like asset-based fees. I like upfront commissions. I steal a lot of accounts from people who charge fees by telling people that the first thing I"m gonna do is turn off the broker meter. They LOVE the sound of that!

[/quote]

No doubt that leaves them with the incorrect impression they'll no longer be paying fees.....

[/quote]

It works like a charm.

[/quote]

And you're happy to mislead them. Make sure you have that resume ready for your next career....

[/quote]

What's the matter?

[/quote]

You mean besides your intentional, and gleeful misleading of clients? Nothing. Good luck with that in the long term, and keep that resume handy.

[quote=knucklehead]

Do you work at Morgan Stanley and charge fees?

[/quote]

Yes, and yes, when the client prefers. Then again, neither of those two things have anything to do with your lack of ethics, which was the issue.

[/quote]

You don't get it...I'm IN the long-term. This is it! If YOUR firm didn't haircut annuities down to 4% and then pay you 35%, you'd like them too. If I put in $100,000 I make 7%*90%= $6,750. If YOU do it, you make 4%*35% = $1400.

It's no wonder YOU hate annuities. I think you're very unethical because you won't sell them to your clients because YOU don't make enough money off of them.

Don't you just hate it when the truth gets out and you get exposed for what you really are?

[/quote]

I don't recall where I said I hated annuities. After all, I sell them where I think they fit (and the haircut is to 5%, fwiw, and they are by far the biggest single ticket, payout wise, that I have).

 Nope, my comment had nothing to do with annuities and everything to do with your gleeful announcement that you misled clients about fees. I don't care what you think you're doing, if you're misleading people, you won't be around long, regardless of what products you sell or approaches you use.

The sad reality is that those of his ilk don’t get sued sooner so that they can report for duty at the used car lot before they do so much damage.

[quote=mikebutler222][quote=knucklehead][quote=mikebutler222][quote=knucklehead][quote=mikebutler222][quote=knucklehead][quote=mikebutler222][quote=knucklehead]

Personally, I don't like asset-based fees. I like upfront commissions. I steal a lot of accounts from people who charge fees by telling people that the first thing I"m gonna do is turn off the broker meter. They LOVE the sound of that!

[/quote]

No doubt that leaves them with the incorrect impression they'll no longer be paying fees.....

[/quote]

It works like a charm.

[/quote]

And you're happy to mislead them. Make sure you have that resume ready for your next career....

[/quote]

What's the matter?

[/quote]

You mean besides your intentional, and gleeful misleading of clients? Nothing. Good luck with that in the long term, and keep that resume handy.

[quote=knucklehead]

Do you work at Morgan Stanley and charge fees?

[/quote]

Yes, and yes, when the client prefers. Then again, neither of those two things have anything to do with your lack of ethics, which was the issue.

[/quote]

You don't get it...I'm IN the long-term. This is it! If YOUR firm didn't haircut annuities down to 4% and then pay you 35%, you'd like them too. If I put in $100,000 I make 7%*90%= $6,750. If YOU do it, you make 4%*35% = $1400.

It's no wonder YOU hate annuities. I think you're very unethical because you won't sell them to your clients because YOU don't make enough money off of them.

Don't you just hate it when the truth gets out and you get exposed for what you really are?

[/quote]

I don't recall where I said I hated annuities. After all, I sell them where I think they fit (and the haircut is to 5%, fwiw, and they are by far the biggest single ticket, payout wise, that I have).

 Nope, my comment had nothing to do with annuities and everything to do with your gleeful announcement that you misled clients about fees. I don't care what you think you're doing, if you're misleading people, you won't be around long, regardless of what products you sell or approaches you use.

[/quote]

I had a feeling it might be 5%. 4% sounded low, even for MS.

How am I misleading anyone when I tell them that I am going to turn off the additional annual fee that his MS broker is charging? I disclose EVERY fee that the client pays. Believe it or not...besides being the right thing to do, it removes the suspicion and closes the deal.

I'm sorry that you can't conceive of telling the truth and closing a deal.

[quote=knucklehead]

I'm sorry you people aren't worth 2% per year. Just because YOU aren't worth it, doesn't mean that others aren't worth it. I know lots of people who charge at least 2% and a friend of mine charges some people up to 2.8%.

Personally, I don't like asset-based fees. I like upfront commissions. I steal a lot of accounts from people who charge fees by telling people that the first thing I"m gonna do is turn off the broker meter. They LOVE the sound of that!

[/quote]

Your post shows you have very little understanding of the value of Financial Planning.  Transactional brokers like yourself do not have a long term interest in the client reaching their financial goals.

Retirement can be 30 years or more.  You take your comission upfront

What continued interest do you have in your clients?  Oh yeah, when they can pony up another 5% to buy another mutual fund. 

[quote=knucklehead]

How am I misleading anyone when I tell them that I am going to turn off the additional annual fee that his MS broker is charging? I disclose EVERY fee that the client pays. [/quote]

If you explain the fee they will pick up ending the "broker meter" you talked about isn't much of a selling point. At best, fee-wise it's a wash, more likely, you're giving them an increase.

[quote=knucklehead]

Believe it or not...besides being the right thing to do, it removes the suspicion and closes the deal.

I'm sorry that you can't conceive of telling the truth and closing a deal.

[/quote]

Yeah, you  closing honestly. That's where this exchange comes from, right?

[quote=knucklehead] [quote=mikebutler222]

No doubt that leaves them with the incorrect impression they'll no longer be paying fees.....

[/quote]

It works like a charm.

[/quote]

After you tell me it "works like a charm" to close by leaving an incorrect impression, what should I think of your honesty? In fact, what should I think of anyone who is forever stressing their profit margin on a particular type of business over all other aspects?

[quote=NASD Newbie]The sad reality is that those of his ilk don't get sued sooner so that they can report for duty at the used car lot before they do so much damage.[/quote]

Newbie you are sooooo smart.

[quote=vbrainy][quote=knucklehead]

I'm sorry you people aren't worth 2% per year. Just because YOU aren't worth it, doesn't mean that others aren't worth it. I know lots of people who charge at least 2% and a friend of mine charges some people up to 2.8%.

Personally, I don't like asset-based fees. I like upfront commissions. I steal a lot of accounts from people who charge fees by telling people that the first thing I"m gonna do is turn off the broker meter. They LOVE the sound of that!

[/quote]

Your post shows you have very little understanding of the value of Financial Planning.  Transactional brokers like yourself do not have a long term interest in the client reaching their financial goals.

Retirement can be 30 years or more.  You take your comission upfront

What continued interest do you have in your clients?  Oh yeah, when they can pony up another 5% to buy another mutual fund. 

[/quote]

I understand the value of financial planning. The value is zero.

Zero?  Hell no, when it's done right you can get a sucker, er a prospect, to pay you several hundred dollar to generate a snazzy printout that come to the conclusion that they need some more insurance and a different mutual fund.

Kajing!

[QUOTE]

 HOWEVER a 2% fee for doing nothing but re-balancing a mutual fund portfolio of the same fund family is just a tad over the top.  A fee of .5% annually would be a more reasonable amount.

[/quote]

And what exactly can you back up this arbitrary statement with?  I think that the price tag of a Lexus is just a tad over the top since it's just a jazzed up Toyota.  Doesn't mean I'm right, does it?

[quote=NASD Newbie]

Zero?  Hell no, when it's done right you can get a sucker, er a prospect, to pay you several hundred dollar to generate a snazzy printout that come to the conclusion that they need some more insurance and a different mutual fund.

Kajing!

[/quote]

I guess everything that you personally don't find value in means someone is getting screwed, huh?  Maybe the entertainment industry is screwing people by charging $9 for a move and $6 for popcorn.  Kajing!  People make their own decisions and if they see value in financial planning, so be it.