UIT fee and expense ratio help

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Feb 18, 2016 5:25 am

This may be a topic for the rookie forum since that is what I am, but I needed advice from those of you who are seasoned and know how to discuss this topic with clients.  

I've just completed most of my training and I am participating in a mentorship program where I am now a member of a team of advisors.  They have converted most of their book over the years into a fee based structure, which the firm has ingrained in me was the way I should grow my book.  However, my team does a lot of work with UITs as well and while I'm participating in this mentorship program, I'm expected to do that as well.  I can speak about the positives of UIT's all day and I like their story.  My only challenge has been discussing fees. The research that I've done over the internet I've found most professionals attempting to steer people away from UIT's because of the fees.  That is not an option for me because of the heirarchy of the team, I'm expected to sale these products.

So, here's what I need help with, as a new advisor in the industry.  I've sold myself on UIT's as a solution, but I haven't sold myself on the fee structure because it hasn't been presented to me right.  Is there anyone out there that can assist me on how they explain fee structure to clients on UIT's so that it doesn't a) scare them away, and b) doesn't avoid talking about the details.  We work a lot with First Trust UIT's if that helps. Here's a link to one that we use www.ftportfolios.com/Common/ContentFileLoader.aspx?ContentGUID=8f41ec65-3bbd-49d3-9008-32d0dc02a845.  Thanks for the help!

Apr 6, 2016 1:43 pm

I'd recommend calling your back office or First Trust directly. They have a schedule that shows how the fees come out over time, upfront fees, fees owed is liquidated early, etc.

I stopped using UITs a fews yrs ago. Not a fan.