My firm's wrap program..your thoughts?
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Nothing to arbitrate. She made money on the stock. Cost her less than 1% to sell, but she came out all right. She isn’t worth the time. I can make up 600k in fee based in no time. Not worth the hassle. she has called me more times in the last 30 days than my best clients have for the last 3 years. The end for this rock head.
Doberman is right. Dump her and let her screw herself into the ground. My be nice mode when dumping clients is "I don't feel that you and I have the the same philosophy on investment strategy and that you would be better off with another advisor" Adios, hasta la vista baby and don't let the door kick you in the ass.....too hard. Just be sure that you have given her the best and most legal advice you can and DOCUMENT, DOCUMENT, DOCUMENT.
[quote=ezmoney]Nothing to arbitrate. She made money on the stock. Cost
her less than 1% to sell, but she came out all right. She isn’t worth
the time. I can make up 600k in fee based in no time. Not worth the
hassle. she has called me more times in the last 30 days than my best
clients have for the last 3 years. The end for this rock head.[/quote]
Make sure you get YOUR manager and compliance dept on board with the
situation asap and have them approve/draft the process in firing the
client. This will give them ownership and they will be more
likely to defend and support you in the future.
I can't believe that no one has suggested a VA for clients who are risk adverse yet need inflation protection. You just need to be careful about how old your clients are.
These days, if you're an RR, you're at risk no matter what you recommend. Pretty sad, I think.
A bad assumption on your part. My business practices are of high standards. Thank you.
If a newbie can be so bold, may I suggest we go back to the topic...
Back to the first post- 150 bps annually for the client to get 500 bps annually? Over a period of 20 years? (Keep in mind that 20 years ago the S&P was at about 192 vs. todays close of 1228.65.) Ignoring the fact that it's almost 1/4 of the client's earnings (150 bps/650 bps gross return = 23.07%) it's rather dismal performance given that the long bond returned nearly as much as the S&P over that time frame and for much of that time money market funds exceeded 500 bps annually.
What the H**L will you do if we are in a long period of low single digit returns from the S&P? It has happened before: 1930-1949, 1965-1982, 2000-? That's longer than the entire careers of many on these boards. There have also been long periods of flat to negative returns from bonds- try combining those with the above.
For your long-term planning purposes, if you're generating >100 bps on your clients' assets (note that the assets belong to your clients, not you) then you may be charging too much. Granted that those in the business for a short time may be over that number, but long-term survival & prosperity depends upon being able to continue to bring that number down.
I charge .75% up to $500,000 then .50% next $500,000- .4% 1 to 2 Mil.-.3% next 2mil. Please note I use DFA for investments passive investing.
My next question is. I am thinking about advertising my fee schedule.
Has anyone else done this and what was the result?
So I guess we should take a haircut on what we charge the client if the market performs poorly. Oh yea I see this all the time in other professions. Doctors, lawyers, CPA's will reduce their rates because the economy is sluggish. Give me a break! That's idiotic.
Just laying it on the line. If you can charge more, be my guest. But if we get a prolonged period of relatively flat performance you'll be taking a much larger portion of the clients' returns and they won't put up with it, especially as other advisors are charging less.
It's not unlike technology, doing more for less money. You don't have to like it but you will have to live with it.
That’s fine if my competitors reduce prices than by all means I will also to compete. However I don’t see the flat market ahead you’re forcasting.
BTW 1.5 % for rebalancing and active management is a good deal. No that does not include fund expenses.
If you can keep clients when you charge them 1.5% plus fund expenses then more power to you.
My opinion, for what it is worth, is that any program that causes total expenses (fees and fund expenses) to exceed 200 bps will be difficult to keep clients happy with. It was EZ in the 90's but I don't think it will be in the 00's and maybe even the 10's.