Free vs. choice? 

Fee only is moral? (lots of immoral Fee Based and lots of honest commissions based people I am sure). 

Without Commissions people Fee based advisors would be dead?  Really?  No

Customers should decide what to pay?  Most have no idea what they are paying because it is burried.



OH PLEASE!!!



Perhaps I am a follower, going along with whatever the regulators
decide…choosing not to engage in combat; but I have been able to be
ahead of the game to play into their hand…however silly it may seem
at times…and my clients have benefited, market share has grown, and
my life has gotten better.  In retro-spect that is better than
fighting.



Is Farm Boy going to change things?  It is what it is and one can
go down crying about the inequities of Big Brother or whatever…they
still go down (not specifically to FB or anyone else…just a
point).  I am not going down, but up…and I am going to have a
ball in the process.  Life is too short!

Right on, rightway. Not everyone is a fighter.

Without Commissions people Fee based advisors would be dead?  Really?  No

How can you know the future. Okay, I was speculating.

Is Farm Boy going to change things?  It is what it is and one can go down crying about the inequities of Big Brother or whatever...they still go down

Farm Boy is one smart cookie, and he and I ain't goin' down without a street fight. We're land owners and we ain't takin' s*** from no suits that come to take our broker dealer affiliated land away.

[quote=coolshoos]

Every good advisor can build a great practice of moderate sized acounts with C shares and serve there clients very very well...despite the fee's...whatever they are...I know that.  Unfortunately that is not the world we live in anymore! We live in a world of the SEC and intense scrutiny...so why swim up stream? 

It's important to remember that part of the game is to steer everyone into the same boat (fee is better than commission, which is empirical nonsense) then steal the boat in some grand regulatory action. Think negociated commission deregulation etc. The fact is every advisor, fee or commission had a stake in this conversation but look at the apathy and outright wrong headedness of those who have posted.

Could fee people really treat the whole current advisory/brokerage universe that exists today? No-way, fee business has always been cream the top at scaled prices and throw away the majority of would be clients. They could not exist well without retail commission rate comparisons. So as commission advisor markets are going to be hammered again here it will just push vast commodization of fee services into their space as well. You would think the fee only crew would be bright enough to figure this out, 12-b1 helps their interests as well. Instead it's a sales pitch a minute about how their fee is better than your commission. Another reminder in history; there were always volunteers within similar groups to help load the trains to death camps or gulags. So all these new breed advisors who sound like Eliot Spitzer consumer advocates or Suze Orman are a major drain on the industry. I'm just not going to get on the train they suggest.

If people are thinking they would write the comment letters to the SEC and get on the right side for smaller clients and virtues of collecting reasonable service fees (12b-1).

[quote=rightway]
Is Farm Boy going to change things?  It is what it is and one can go down crying about the inequities of Big Brother or whatever...they still go down (not specifically to FB or anyone else...just a point).  I am not going down, but up...and I am going to have a ball in the process.  Life is too short! [/quote]

I play the game too, I've switched all my 401-k 12-b1 to fees for example getting ready for the screw to turn. The fact remains your apathy and inaction only lowers your income. You should submit the SEC comment letters and encourage your peer to do the same. 

If the whole word was forced into "fee-only" the next thing would be to make it "fee by the hour" and the like of Barbara Roper and Cox would think $20 per hour would be "too much". There are plenty of vested interests trying to destroy you, it's just really sad to see on this forum how internally weak and corrupted brokers and advisors have become themselves.

If people are thinking they would write the comment letters to the SEC and get on the right side for smaller clients and virtues of collecting reasonable service fees (12b-1).

Good idea about writing comment letters. Do you have an address - I'm too lazy to look it up, but I would write a note to the SEC.

Honestly, I think we are at the mercy of our broker dealers to articulate this issue, since the average rep does not care or have a clue what you are talking about. Some of the bright ones are developing equity in their RIAs so they can sell and get out.

[quote=coolshoos]

If people are thinking they would write the comment letters to the SEC and get on the right side for smaller clients and virtues of collecting reasonable service fees (12b-1).

Good idea about writing comment letters. Do you have an address - I'm too lazy to look it up, but I would write a note to the SEC.

Honestly, I think we are at the mercy of our broker dealers to articulate this issue, since the average rep does not care or have a clue what you are talking about. Some of the bright ones are developing equity in their RIAs so they can sell and get out.

[/quote]

If you follow the first two links I posted (I started this thread) you can sign a letter from the trade group or you can comment directly to the SEC.

You're right, this doesn't seem a big brain site. Mostly newbees trying to figure out basics about survival and how much the training costs are really killing them if they succeed. Advisors as rule are not attacted to "collective" issues other than what is directly in front of them. This is why doctors, lawyers and even teachers are better represented for their own interests.

You would think the firms and producers are in the same court here. That would be very niave of course. It's so complicated and miultilayered; don't be surprised if the whole deal comes down to cutting field producers while "firms" rename the fees for "marketing only". I could easily see Schwab, the direct fund merchants and wirehouses going this root. Your firm will soon be telling you; "you should be building fee income (1940 act) anyway" as your 12-b1 income steams are about to be gutted. Your firm will gladly throw you to the wolves if they get to keep basis points for themselves.

Cox is so off base, the history of 12-b1 is now a complete lie of the Jack Bogle and Suze Orman variety. So while the most arrogant greed forces in the world depict you as pirates and cutthroats most on the board don't think it matters. 

The only reason most small accounts get services at all is:

1)There will be more money coming in the future

2)12B-1 fees. 

Maybe some brokers would say "so what", if they told all their small accounts (under $50,000) to go to Vanguard or whatever, but how will the EDJ rep in your hometown survive?  That nice lady in the EDJ in my hometown would be toast..............

Your firm will soon be telling you; "you should be building fee income (1940 act) anyway" as your 12-b1 income steams are about to be gutted. Your firm will gladly throw you to the wolves if they get to keep basis points for themselves.

Actually, yes, and we are hearing this about wrap accounts, too.

So you think firms want to keep the old $$ with trails, and new money will be what, wrap accounts or a direct channel?

Since the personal relationship with Mr. and Ms. client is most of the real value that is produced and delivered, if we go to a lowest cost producer scenario for products, I should think most of us will be going the RIA route, if necessary. If we have the b/ds throwing us to the wolves, so be it. We just need to see things clearly for what they are.

[quote=roostertale]

Your firm will soon be telling you; "you should be building fee income (1940 act) anyway" as your 12-b1 income steams are about to be gutted. Your firm will gladly throw you to the wolves if they get to keep basis points for themselves.

Actually, yes, and we are hearing this about wrap accounts, too.

So you think firms want to keep the old $$ with trails, and new money will be what, wrap accounts or a direct channel?

Since the personal relationship with Mr. and Ms. client is most of the real value that is produced and delivered, if we go to a lowest cost producer scenario for products, I should think most of us will be going the RIA route, if necessary. If we have the b/ds throwing us to the wolves, so be it. We just need to see things clearly for what they are.

[/quote]

This of course falls into the industrial sales fantasy world where hype and reality conflict. Less than 15% of b/d income is really "fee driven". The numbers firm tout for this class on income is wildly and inacurately reported. Many include 12-b1 in the stats.

As for the whole world moving to the 1940 act in response, wake up and smell the coffee. We're talking about a 50-75% reduction in advisor head counts, a fantastic reduction in advisor margins and the total commodization of the 1940 act space. As I have said before the chest pounding, "I'm better then them" RIA types need the commission world far more then they can admit or accept. As for that model ever having the market share of today with 12-b1 it can never happen. So fee hyperbole was good for high end accounts that would be a zero breakpoints is a good business model the idea of fee accounts for 100k is a dubious model. For one thing big clients behave one way and small accounts another. The liabilities of the 1940 are also being esculated and fee services were brought down to the lower retail levels. Poor regulation following poor industry leadership = more advisor risks, lower margins , lower market share in the advisor space. The fact that this board is so dumb downed  to what is it's own interest can in part be blamed on the firms themselves. They've been selling "less" to advisors for a generation now.

So all kinds of people are in apathy who should be writing logical arguments to the SEC for 12-b1. They should also let their dealers know if they sell them down the river on this issue they will walk. 

 Poor regulation following poor industry leadership = more advisor risks, lower margins , lower market share in the advisor space. The fact that this board is so dumb downed  to what is it's own interest can in part be blamed on the firms themselves. They've been selling "less" to advisors for a generation now.

So all kinds of people are in apathy who should be writing logical arguments to the SEC for 12-b1. They should also let their dealers know if they sell them down the river on this issue they will walk. 

B/d greed, RIA greed, government greed, media greed.

I totally agree with you. I'm just weary of running my own business and taking all the risk. If the idiots in Washington want to turn this into a socialist nation and reduce consumer choices, help by greedy broker dealers, moralistic media and RIAs and political correctness and all the rest, for those last years before retirement, I'll just go sit in a bank and provide " service " and eye the young babes.

I think we're in the golden age right now before the hand of socialist wisdom and planning comes down on a lot of things - ready to be dumbed down with a smile. Almost time to invest in real estate again.

[quote=roostertale]

 Poor regulation following poor industry leadership = more advisor risks, lower margins , lower market share in the advisor space. The fact that this board is so dumb downed  to what is it's own interest can in part be blamed on the firms themselves. They've been selling "less" to advisors for a generation now.

So all kinds of people are in apathy who should be writing logical arguments to the SEC for 12-b1. They should also let their dealers know if they sell them down the river on this issue they will walk. 

B/d greed, RIA greed, government greed, media greed.

I totally agree with you. I'm just weary of running my own business and taking all the risk. If the idiots in Washington want to turn this into a socialist nation and reduce consumer choices, help by greedy broker dealers, moralistic media and RIAs and political correctness and all the rest, for those last years before retirement, I'll just go sit in a bank and provide " service " and eye the young babes.

I think we're in the golden age right now before the hand of socialist wisdom and planning comes down on a lot of things - ready to be dumbed down with a smile. Almost time to invest in real estate again.

[/quote]

Things are very fluid right now, and the Bogleheads are rubbing their grimy little paws and saying I told you so........

Funny thing is after 30 years, Vanguard and the no-load arm of Fido only have about 20% of ALL mutual fund assets...........

Ain't nothin' like the real thing baby.