Are you suggesting that you favor a system where you charge a guy a fee for acting as an advisor while also charging a commission for performing trades that you suggest?

[quote=NASD Newbie]Are you suggesting that you favor a system where you charge a guy a fee for acting as an advisor while also charging a commission for performing trades that you suggest?[/quote]

He said ticket charges! There is a huge difference!

I think we're talking about ticket charges rather than commissions.  For example, LPL charges fee-based clients $15 per equity trade for back office crap like sending confirmations, etc.  As an advisor, I can eat this, or I can pass it along to the client.  As opposed to a commission, I receive none of the ticket charge as compensation.  Since my former firm charged ticket charges, I have opted to keep that model for the most part, and only eat the ticket charges where it was an issue for an A client.  It's pretty easy to explain to a client that a $13 mutual fund ticket charge is nothing compared to the $1,000 commission he/she just saved.  Explain up front that the ticket charges are insignificant compared to commissions saved and that you receive nothing from them.  Most folks are fine with this.  If not, you have to weigh whether or not they are a good enough client for you to eat the charges.

BTW, EDJ...what B/D did you end up affiliating with?  Eating ticket charges vs. not eating them sounds like LPL SAM II vs. SAM I to me.

Indyone is correct, we are talking about ticket charges.  I think that what I am talking about is similar to the SAM I SAM II, but I'm not at LPL, I'm at a smaller BD that due to it's size I won't name to maintain anonymity. 

I have 2 choices, 1 that has $25 ticket charges for some funds and $0 ticket charges for some funds (Pershing Fundvest, for those of you who are familiar with that program).  I have no option to eat the ticket charges, they must be passed on to the client.  The other choice has ticket charges ranging from $10-30, depending on the fund family, and I can either pay ticket charges myself or pass them on.  This program also has slightly higher administrative fees. 

FYI for Put, I am not double dipping, although I used to run up against another advisor who had 1.5% wrap accounts full of B share funds.  Guess what, after 5-6 years, every fund he ever sold started to lag behind what he expected it to do, so they would roll over into another B share.  I am in a different community now so I haven't seen any of his statements for a few years, and I would assume his firm put a stop to that eventually. 

I was never able to transfer any of those accounts, which was very frustrating.  I'm sure part of the problem was that I was very new at the time, so I was pretty nervous trying to transfer a $300,000 account and it showed.  Also, he showered attention on his clients.  I tried to explain that the nice fruit basket was full of apples the client bought for $300 each, but it didn't resonate because he was "such a nice man."  I wish I could get another crack at a few of those prospects.  lol