[quote=Soothsayer]Client did not know the difference between share classes.  He was too busy building a business.  Client did not sign any letter.  Ever. Period.  End of story.  [/quote] <?:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

You don't know that's true unless you've seen his entire file from ML. Believe it or not, clients are always completely candid.

Every firm, or at least every wirehouse, has gone through the B shares sales review drill. At one time at least one wirehouse I knew of had a $500k limit on total B share sales in an account. Those limits have moved down through $250k, $100k and now, I know of a firm that won’t allow more than $25K in B share sales to an entire household in a 6 month period.

I’m not a fan of mutual funds, period and have sold very few B shares in my career, but I’ve had a chance to watch the evolution. Your client’s story has too many missing details to condemn the broker just yet.

[quote=Soothsayer] I always say that your clients will find out the truth--sooner or later.  Don't do anything so shortsighted, selfish, and stupid that a good, trained eye can't pick it up in a 30-second cold-eyes review. [/quote]

Agreed.

[quote=Soothsayer] The broker was all of the above. [/quote]

Not yet established.

[quote=Soothsayer] My trained eye caught it.  The client felt betrayed, then got pissed and moved his account. [/quote]

Well, all I’ve seen proven so far is that you did some counter selling….

[quote=Soothsayer] However, I have a client on my book as of this moment who sued Morgan for the exact same thing on a 100K purchase.  He won a rather sizeable chunk in arbitration.  That is an absolute fact.  I am not making it up. [/quote]

 

I’d love to see the details on that one. There’s nothing inherently wrong with that. I wouldn’t do it, but there are plenty of situations where a client chooses B shares at that level over A shares because he doesn’t want to pay the 3% or 3.5% sales charge and no amount of explaining will change their minds.

[quote=Put Trader] [quote=Put Trader]
Plaintiff's attorny stores are filled with, "....than damn if they didn't produce a document where my client acknowledged......"

[/quote]

I wonder if using a wireless keyboard will cause crazy typos if the batteries are weak?  I think I'll change batteries, and stop watching the news at the same time my fingers are flying across the keys.
[/quote]

And put down the crackpipe too... 

, but there are plenty of situations where a client chooses B shares at that level over A shares because he doesn’t want to pay the 3% or 3.5% sales charge and no amount of explaining will change their minds.

That is sure the truth.  I have a client who still insisted  that he wanted to buy B shares even after I explained extensively to him that he would get breakpoints, pulled the info off of the NASD fund calculato to show the cost over time, drew diagrams, and practically did a song and dance about it.  I finally made him write in his own handwriting, sign and date, that he was aware of this and decided to have B shares anyway. I also had him sign and date the NASD illustration for his file.   C.Y.O.A.

As to clients being "candid". They may think that they are being so.....but, they only remember what they want to, and what is convenient at the time.  As much as I hate having more paperwork, I have suggested to our compliance department, that we need to have the clients also sign a disclosure regarding bonds and brokered Cds in regards to the possible flucuations etc.   Somehow when they get their statements they conveniently have forgotton that you explained that the value of their CD or bond will vary.

[quote=annuity guy]

[quote=Soothsayer]Client did not know the difference between share classes.  He was too busy building a business.  Client did not sign any letter.  Ever. Period.  End of story.  I always say that your clients will find out the truth--sooner or later.  Don't do anything so shortsighted, selfish, and stupid that a good, trained eye can't pick it up in a 30-second cold-eyes review.  The broker was all of the above.  My trained eye caught it.  The client felt betrayed, then got pissed and moved his account.  For the record, the client has not mentioned sueing Merrill, nor have I suggested it.  However, I have a client on my book as of this moment who sued Morgan for the exact same thing on a 100K purchase.  He won a rather sizeable chunk in arbitration.  That is an absolute fact.  I am not making it up.  [/quote]

The client was probably some idiot who thought that he was too cool to pay a commission and that he would beat the system by buying B shares.

I think you're mad because you want to churn him out of his funds and he doesn't want to pay the CDSC.

Your $100,000 guy is lying. Best case, he won the CDSC, which is not a "sizable chunk."

[/quote]

Soothsayer's seemed pretty reasonable in the past, so I don' want to think the worst of him. OTOH, if I didn't know any of the parties involved, that's exactly what I would have guessed.

Honest, no offense Sooth...

[quote=babbling looney]

, but there are plenty of situations where a client chooses B shares at that level over A shares because he doesn’t want to pay the 3% or 3.5% sales charge and no amount of explaining will change their minds.

That is sure the truth.  I have a client who still insisted  that he wanted to buy B shares even after I explained extensively to him that he would get breakpoints, pulled the info off of the NASD fund calculato to show the cost over time, drew diagrams, and practically did a song and dance about it.  I finally made him write in his own handwriting, sign and date, that he was aware of this and decided to have B shares anyway. I also had him sign and date the NASD illustration for his file.   C.Y.O.A.

[/quote]

Some firms require disclosure forms to be  signed just as you did. Others have simply outlawed the selling of B shares above a very low level. They're trying to avoid anything that gives a client a "regulatory put option".

It's sad, but these days you just have to protect yourself.

[quote=Put Trader] [quote=Soothsayer]Client did not sign any letter.  Ever. Period.  End of story.   [/quote]

Plaintiff's attorny stores are filled with, "....than damn if they didn't produce a document where my client acknowledged......"

Unless you have entered the discovery phase of an arbitrtion or litigation case you have no idea what a client did and did not sign.

Why do you suppose brokerage houses are so williing to settle arbitration?  Let's say with B share issues--what do you think Morgan Stanley was afraid of that they settled for a "big chunk" with your client?
[/quote]

The client did not sign anything.  End of story.  Period.  He is certainly not a sophisticated investor, but he is not a dumb man.  (How else do you think he has a net worth of $6 million +?  Self-made, too.)  He was eager to see and learn the difference in share classes.  I was the first to show him.  There are certain salt-of-the-earth people that you learn to believe at face value.  He insists that he never signed anything.  I believe him.  Unconditionally.  He has not lied, exagerated, or misled me on anything to this point.  He has been an absolute pleasure to work with. 

[quote=annuity guy]

[quote=Soothsayer]Client did not know the difference between share classes.  He was too busy building a business.  Client did not sign any letter.  Ever. Period.  End of story.  I always say that your clients will find out the truth--sooner or later.  Don't do anything so shortsighted, selfish, and stupid that a good, trained eye can't pick it up in a 30-second cold-eyes review.  The broker was all of the above.  My trained eye caught it.  The client felt betrayed, then got pissed and moved his account.  For the record, the client has not mentioned sueing Merrill, nor have I suggested it.  However, I have a client on my book as of this moment who sued Morgan for the exact same thing on a 100K purchase.  He won a rather sizeable chunk in arbitration.  That is an absolute fact.  I am not making it up.  [/quote]

The client was probably some idiot who thought that he was too cool to pay a commission and that he would beat the system by buying B shares.

I think you're mad because you want to churn him out of his funds and he doesn't want to pay the CDSC.

Your $100,000 guy is lying. Best case, he won the CDSC, which is not a "sizable chunk."

[/quote]

The client is a very shrewd multi-millionaire who has not quibbled with a single fee or charge to this point.  He just likes it to be upfront, honest, and put in "simple terms that he can retell to his wife if necessary."

He liquidated his proprietary B shares.  He called from my office on speakerphone and got the CDSC.  I did not encourage the sale.  He was pissed.  His trust had been violated.  He wanted them gone.

The "sizeable chunk" check was deposited to the client's account in my office.  I know the amount to the penny.  I took a copy of the face that is still in the client's file.  CDSC my ass!  It was enough money to buy a Cadillac Escalade (at the GM employee price).

Shrewd and buying B shares can't occupy the same space.

I think you're lying. Let's say, in your favor, that your african American car (that you don't really have) cost $50,000. The client had to put $5,000,000 into MF's with you. I don't believe that your "shrewd" millioinaire did that. If he's stupid enough to buy B shares, he's too stupid to have $5,000,000.

In short, you're a liar with a moron for a client.

Do the mutual fund companies ever get in trouble for inventing B Shares?

I blame them. I never saw the advantage, at least, not ethically, so I never sold them.

I find tons of them around, though.

[quote=Roger Thornhill]

Do the mutual fund companies ever get in trouble for inventing B Shares?

I blame them. I never saw the advantage, at least, not ethically, so I never sold them.

I find tons of them around, though.

[/quote]

The advantage of B shares, imho, is limited to those buyers who will never achieve the level of purchase that gives them a break on the upfront loads of A shares. However, if you want to indict mutual fund companies and the brokers that sell B shares, we could expand that discussion to mutual funds and brokers who sell them, period, to investors of sizable means.

[quote=Soothsayer]

[quote=Put Trader] [quote=Soothsayer]Client did not sign any letter.  Ever. Period.  End of story.   [/quote]

Plaintiff's attorny stores are filled with, "....than damn if they didn't produce a document where my client acknowledged......"

Unless you have entered the discovery phase of an arbitrtion or litigation case you have no idea what a client did and did not sign.

Why do you suppose brokerage houses are so williing to settle arbitration?  Let's say with B share issues--what do you think Morgan Stanley was afraid of that they settled for a "big chunk" with your client?
[/quote]

The client did not sign anything.  End of story.  Period.  [/quote]

Having been in the business all day now, I wouldn't bet the farm on that unless I had the file in front of me.

[quote=stanwbrown][quote=Soothsayer]

[quote=Put Trader] [quote=Soothsayer]Client did not sign any letter.  Ever. Period.  End of story.   [/quote]

Plaintiff's attorny stores are filled with, "....than damn if they didn't produce a document where my client acknowledged......"

Unless you have entered the discovery phase of an arbitrtion or litigation case you have no idea what a client did and did not sign.

Why do you suppose brokerage houses are so williing to settle arbitration?  Let's say with B share issues--what do you think Morgan Stanley was afraid of that they settled for a "big chunk" with your client?
[/quote]

The client did not sign anything.  End of story.  Period.  [/quote]

Having been in the business all day now, I wouldn't bet the farm on that unless I had the file in front of me.

[/quote]

Indulge a horror story.

Years ago a certain brokerage firm--gone through a series of mergers--had an options agreement that had a black space in it.  The space was to be where the client's objectives were spelled out.

It was SOP at this firm to have the client sign the agreement without wording in that slot--then type in things like, "I am a crazy speculator and love to lose" (for you the majority of those who read this forum, those were not the real words.)

Sometimes clients had a version of the form with their signature on it but the space was blank--they left the office with the form before a sales assistant typed in the damning wording.  But normally the brokers would retain everything with the signatures on it and send a package of documents to the client as a form of "welcome."

Who among us is going to take the time to read documents that we've already signed?

If that client should suffer losses in options he might be inclined to sue--in those days it was sue, not arbitrate.  Juries were notorious for coming down with decisions like, "I be the smartest person I be knowing and I did not understand what the lawyers were saying so I be giving the victim their money back, plus I be giving the victim another $100 million to teach those Wall Street big shots not to fool with the people."

Normally the plaintiff's attorney would ask their client for all the documentation that the client had.  Imagine the "gotcha" emotions when they see that their client acknowledged accepting great risk as well as an understanding of the options market.

Anybody who thinks that their client did not sign something that can come back to bite  you on the butt is a babe in the woods.

[quote=stanwbrown][quote=Roger Thornhill]

Do the mutual fund companies ever get in trouble for inventing B Shares?

I blame them. I never saw the advantage, at least, not ethically, so I never sold them.

I find tons of them around, though.

[/quote]

The advantage of B shares, imho, is limited to those buyers who will never achieve the level of purchase that gives them a break on the upfront loads of A shares. However, if you want to indict mutual fund companies and the brokers that sell B shares, we could expand that discussion to mutual funds and brokers who sell them, period, to investors of sizable means.

[/quote]

In addition to what Stan said, I think they may be suitable for older clients (75+) or someone in very poor health.  CDSC is waived in the event of death.  The other scenario is in an IRA account where the owner is very close to having RMDs or is already taking RMDs.  CDSC is also waived in this scenario.  I've used B shares in cases like this.  I don't use them when the client has 400K in a single proprietary fund, and each month new money is added to that same pool of B shares.  And, again, I'd bet my house the guy never signed anything.  My client who clipped Morgan didn't.  If he had, it would have come up in arbitration.  It didn't.

[quote=annuity guy]

Shrewd and buying B shares can't occupy the same space.

I think you're lying. Let's say, in your favor, that your african American car (that you don't really have) cost $50,000. The client had to put $5,000,000 into MF's with you. I don't believe that your "shrewd" millioinaire did that. If he's stupid enough to buy B shares, he's too stupid to have $5,000,000.

In short, you're a liar with a moron for a client.

[/quote]

Isn't that what your annuties are?  Over-priced B-shares in drag?  I only used the Escalade example because I knew that you would know the price.  In fact, I figured it to be the vehicle of choice for a slimy, unscrupulous annuity pimp.  Is your life savings hanging around your neck right now?

[quote=Soothsayer][quote=stanwbrown][quote=Roger Thornhill]

Do the mutual fund companies ever get in trouble for inventing B Shares?

I blame them. I never saw the advantage, at least, not ethically, so I never sold them.

I find tons of them around, though.

[/quote]

The advantage of B shares, imho, is limited to those buyers who will never achieve the level of purchase that gives them a break on the upfront loads of A shares. However, if you want to indict mutual fund companies and the brokers that sell B shares, we could expand that discussion to mutual funds and brokers who sell them, period, to investors of sizable means.

[/quote]

 My client who clipped Morgan didn't.  If he had, it would have come up in arbitration.  It didn't.

[/quote]

I'd still like to see the details of this arbitration. It's a matter of public record and with a name we could all read the file.

[quote=stanwbrown][

The advantage of B shares, imho, is limited to those buyers who will never achieve the level of purchase that gives them a break on the upfront loads of A shares. However, if you want to indict mutual fund companies and the brokers that sell B shares, we could expand that discussion to mutual funds and brokers who sell them, period, to investors of sizable means.

[/quote]

When they first came out, there wasn't any numerical advantage to owning them (at least, not where I worked). Most firms created them to copy other firms, but somebody started this "no up front sales charge" madness. The NASD allowed it, then wants to punish people for being human? Those in charge at the time over at the NASD should be shot.

There's nothing wrong with people of means owning mutual funds. Plenty do. There's no sales charge for large purchases, and fee reduced shares for purchases larger than that. Compared to the fees charged by most RIAs, mutual funds are often cheap, so there's no reason to indict them for being available, or for brokers selling them, as long as they use A Shares.

Your analogy is poor.

[quote=Roger Thornhill][quote=stanwbrown][

The advantage of B shares, imho, is limited to those buyers who will never achieve the level of purchase that gives them a break on the upfront loads of A shares. However, if you want to indict mutual fund companies and the brokers that sell B shares, we could expand that discussion to mutual funds and brokers who sell them, period, to investors of sizable means.

[/quote]

When they first came out, there wasn't any numerical advantage to owning them (at least, not where I worked).

[/quote]

Huh? Small investors paying 5.5% to 8.5% upfront on A shares sure did see an advantge with B shares, and they have since they were first introduced.

[quote=Roger Thornhill]

 Most firms created them to copy other firms, but somebody started this "no up front sales charge" madness. The NASD allowed it, then wants to punish people for being human? Those in charge at the time over at the NASD should be shot.

[/quote]

uh, but there IS no upfront sales charge. People who don't qualify for breakpoints with A shares CAN benefit wth B shares. Especially those that convert to As. Like I said, I'm no fan of mutual funds, much less B shares, but let's not pretend there's no advantage to any client.

Clients should be informed of ALL the costs, just as babbling pointed out.

[quote=Roger Thornhill]There's nothing wrong with people of means owning mutual funds. Plenty do. There's no sales charge for large purchases, and fee reduced shares for purchases larger than that.

[/quote]

Please be serious. What tiny fraction of A share sales go at NAV? The vast majority or funds sold to people of means include a sales charge that a SMA would have avoided, NO discount on management fees as an SMA would have provided, NO tax consideration to the individual as an SMA would have provided. But what DO those fund sales have that SMAs don't? A big payday for brokers.

[quote=Roger Thornhill]

Compared to the fees charged by most RIAs, mutual funds are often cheap, so there's no reason to indict them for being available, or for brokers selling them, as long as they use A Shares.

[/quote]

Mutual funds can be cheaper than RIAs or SMA fees, but they rarely are for large accounts, and there's that sales charge that the vast majority of fund buyers pay. Toss in tax advandages and funds rarely, if ever, work out cheaper.

Let's not ignore the other sins of funds while focusing on B shares.

[quote=stanwbrown]Huh? Small investors paying 5.5% to 8.5% upfront on A shares sure did see an advantge with B shares, and they have since they were first introduced.[/quote]

They saw the advantage because too many RRs told them "There's no up front sales charge." They were a VERY BAD idea, from the get go.

It's safer to sell contractual plans than a B Share.

[quote=stanwbrown]uh, but there IS no upfront sales charge. People who don't qualify for breakpoints with A shares CAN benefit wth B shares. Especially those that convert to As. Like I said, I'm no fan of mutual funds, much less B shares, but let's not pretend there's no advantage to any client.[/quote]

In some fund families, there is no difference. That's my point. No difference, no reason to sell them, so I never did. This is why I've never had a single client complaint, and I have numerically more clients than most.

[quote=stanwbrown]Clients should be informed of ALL the costs, just as babbling pointed out.[/quote]

And they are, but a prospectus isn't enough, apparently. The NASD is crucifying brokers and B/Ds. The best path is to avoid these timebombs. Or, better yet, cut out the NASD. They are a very expensive middleman.

[quote=stanwbrown]Please be serious. What tiny fraction of A share sales go at NAV? The vast majority or funds sold to people of means include a sales charge that a SMA would have avoided, NO discount on management fees as an SMA would have provided, NO tax consideration to the individual as an SMA would have provided. But what DO those fund sales have that SMAs don't? A big payday for brokers.[/quote]

I'm always serious. I've sold millions at NAV. Back when I was just an RR, and most B/Ds weren't doing fees, I had no choice with large tickets. I took my 70 basis points GDC, and went to my next appointment.

[quote=stanwbrown]Mutual funds can be cheaper than RIAs or SMA fees, but they rarely are for large accounts, and there's that sales charge that the vast majority of fund buyers pay. Toss in tax advandages and funds rarely, if ever, work out cheaper.[/quote]

Since Bessemer Trust charges, on average, 67 basis points (and they are MUCH bigger than you will ever be), and First Northern Trust is in the same ballpark (and they are even bigger), there is no real fee advantage for even the largest of accounts. What some po-dunk RIA advertises, and what the affluent actually pay, are two different things. I don't see my clients with eight figures liquid running down to Schwab or TD Ameritrade, unless there's an advisor in the mix.

[quote=stanwbrown]Let's not ignore the other sins of funds while focusing on B shares.[/quote]

It was your idea to segue into this area.

[quote=Roger Thornhill]

[quote=stanwbrown]Huh? Small investors paying 5.5% to 8.5% upfront on A shares sure did see an advantge with B shares, and they have since they were first introduced.[/quote]

They saw the advantage because too many RRs told them "There's no up front sales charge." They were a VERY BAD idea, from the get go.

[/quote]

Sorry, but repeating an error doesn't make it so. There IS an advantage to people buying in such low dollar amounts that they never qualify for breakpoints in A shares, and their IS no upfront charge. Fees, obviously should be fully explained, but the total cost is often less to clients who are only going to be buying in small amounts.

[quote=Roger Thornhill]

[quote=stanwbrown]uh, but there IS no upfront sales charge. People who don't qualify for breakpoints with A shares CAN benefit wth B shares. Especially those that convert to As. Like I said, I'm no fan of mutual funds, much less B shares, but let's not pretend there's no advantage to any client.[/quote]

In some fund families, there is no difference. That's my point. No difference, no reason to sell them, so I never did. This is why I've never had a single client complaint, and I have numerically more clients than most.

[/quote]

I'm getting the feeling you have no idea what you're talking about. I'm no fan of funds period, and B shares especially, but to say there's "no difference"??????? Of course there's a difference. Money spent on the front load isn't available for growth. If you're not getting any A share breakpoints and are forced to pay full boat on loads, there's a difference that overcomes the 12b-1 cost of B shares.

[quote=Roger Thornhill]

[quote=stanwbrown]Clients should be informed of ALL the costs, just as babbling pointed out.[/quote]

And they are, but a prospectus isn't enough, apparently. The NASD is crucifying brokers and B/Ds. The best path is to avoid these timebombs. Or, better yet, cut out the NASD. They are a very expensive middleman.

[/quote]

sigh... I never said the prospectus was enough. Babblingloony pointed out the illistration she used. That's a fine and full disclosure of fees. Again, I'm not defending B shares, but your attacks are based on incorrect information.

[quote=Roger Thornhill]

[quote=stanwbrown]Please be serious. What tiny fraction of A share sales go at NAV? The vast majority or funds sold to people of means include a sales charge that a SMA would have avoided, NO discount on management fees as an SMA would have provided, NO tax consideration to the individual as an SMA would have provided. But what DO those fund sales have that SMAs don't? A big payday for brokers.[/quote]

I'm always serious. I've sold millions at NAV. Back when I was just an RR, and most B/Ds weren't doing fees, I had no choice with large tickets. I took my 70 basis points GDC, and went to my next appointment.

[/quote]

Once again, you miss the point. I'll bet the ranch you sold, as the indurty does, the vast majority of your A shares with a load. NAV sales (usually $1M ticket minimums) are uncommon. Soooooo, you put a sales load on asset management to someone who COULD have recieved better management, less expensively and with tax situation awareness and NO SALES charge with an SMA. I find it hard to listen to somone doing that trying to make the case that they're pure as the driven snow and that the guy selling B shares is evil incarnate.

[quote=Roger Thornhill]

[quote=stanwbrown]Mutual funds can be cheaper than RIAs or SMA fees, but they rarely are for large accounts, and there's that sales charge that the vast majority of fund buyers pay. Toss in tax advandages and funds rarely, if ever, work out cheaper.[/quote]

Since Bessemer Trust charges, on average, 67 basis points (and they are MUCH bigger than you will ever be), and First Northern Trust is in the same ballpark (and they are even bigger), there is no real fee advantage for even the largest of accounts.

[/quote]

Let's see if we have the details correct here... you sell only at NAV, you sell super inexpensive funds, you don't place any management fee on that in any other form and none of your clients would benefit taxwise from direct ownership of their securities over a pooled situation.

Wow, you're a saint 

[quote=Roger Thornhill]

What some po-dunk RIA advertises, and what the affluent actually pay, are two different things. I don't see my clients with eight figures liquid running down to Schwab or TD Ameritrade, unless there's an advisor in the mix.

[/quote]

Sounds like you have me confused with an RIA (I've been talking about SMAs), and I have no clue what that reference to TD or Shwab was about. It certainly didn't have anything to do with what we've been discussing.

[quote=Roger Thornhill]

[quote=stanwbrown]Let's not ignore the other sins of funds while focusing on B shares.[/quote]

It was your idea to segue into this area.

[/quote]

Hmmm, to make it clear to you, I see no moral high ground deserved among fund sellers, be they A or B shares...

[quote=stanwbrown]Sorry, but repeating an error doesn't make it so. There IS an advantage to people buying in such low dollar amounts that they never qualify for breakpoints in A shares, and their IS no upfront charge. Fees, obviously should be fully explained, but the total cost is often less to clients who are only going to be buying in small amounts.[/quote]

You must be new to the business. The development you mention is relatively new. When first issued, B Shares had no numerical fee advantage to the A Shares they competed with. It was a concept sale, pure and simple, and I know why they were first created this way (few retail brokers do, including you).

[quote=stanwbrown]I'm getting the feeling you have no idea what you're talking about. I'm no fan of funds period, and B shares especially, but to say there's "no difference"??????? Of course there's a difference. Money spent on the front load isn't available for growth. If you're not getting any A share breakpoints and are forced to pay full boat on loads, there's a difference that overcomes the 12b-1 cost of B shares.[/quote]

You must be a liberal. You talk about feelings. I'm talking about facts.

[quote=stanwbrown]sigh... I never said the prospectus was enough. Babblingloony pointed out the illistration she used. That's a fine and full disclosure of fees. Again, I'm not defending B shares, but your attacks are based on incorrect information.[/quote]

I'm not attacking anything. I'm just correcting your errors. I may have to hire help, because you're making so many.

[quote=stanwbrown]Once again, you miss the point. I'll bet the ranch you sold, as the indurty does, the vast majority of your A shares with a load. NAV sales (usually $1M ticket minimums) are uncommon. Soooooo, you put a sales load on asset management to someone who COULD have recieved better management, less expensively and with tax situation awareness and NO SALES charge with an SMA. I find it hard to listen to somone doing that trying to make the case that they're pure as the driven snow and that the guy selling B shares is evil incarnate.[/quote]

I haven't sold my ranch, but I did just buy another section adjacent to my Northern most riverbottom section. $1,200 an acre, with no need to irrigate.

Anyways...You are a newby. While fee-based management predates the mutual fund by, oh, well, infinity (but in modern times, a century, using traditional securitization of business entities and their debt obligations), the reality is that until the computer could be used to fractionalize the appearance of ownership in securities that cannot be fractionalized, an SMA could never compete with a mutual fund on portfolios of less than $500,000.

Today, we do it for $25,000, but that's not the point (did you have one? I didn't see one, just arguments for the sake or arguments, making you a member of the mental midget club).

While there's no sales charge on an SMA, there's a toll to enter. It sounds like you don't discuss this with your clients, making you just as guilty as the B Share peddler that says his fund has no load.

I suspected this, but now you have proven it.

[quote=stanwbrown]Let's see if we have the details correct here... you sell only at NAV, you sell super inexpensive funds, you don't place any management fee on that in any other form and none of your clients would benefit taxwise from direct ownership of their securities over a pooled situation. [/quote]

You are guessing at details that you do not have access to. This makes you a liberal, and a very poor one, at that.

Smart people ask questions. You make assumptions. We all know what that makes you.

[quote=stanwbrown]Wow, you're a saint  [/quote]

16,000+ clients agree. I'm a saint. A multiple of nine figures AUM and counting.

[quote=stanwbrown]Sounds like you have me confused with an RIA (I've been talking about SMAs), and I have no clue what that reference to TD or Shwab was about. It certainly didn't have anything to do with what we've been discussing.[/quote]

I'm not confused about anything, except what your purpose on this board is. I see that you post more than anybody. You must not have many clients.

By the way, who do you think manages an SMA? *snicker*

[quote=stanwbrown]Hmmm, to make it clear to you, I see no moral high ground deserved among fund sellers, be they A or B shares...[/quote]

Then you suffer from myopia.

Anybody that sells an investment that creates wealth is helping the investor. The fee flow of capital -- to where it's rewarded -- is what makes capitalism work better than any other system. Retail brokers facilitate that flow by keeping money in the auction for the better assets. The create demand, which is a function the system suffers without.

Without them, what little you've saved would decrease in value.

You need brokers. You should want brokers. Without them, you'd be sweeping the factory floor.