Indy's Charging % of AUM
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I’ve never seen more conflict in my life than through a fee-based BD relationship. They try to be everything, when they are clearly a second-row choice.
The BD guy is a sad situation. You recommend and sell what is ‘needed’ according to your own financial situation for the month (you know what I’m saying), and I can’t think of a single instance where a BD person has referred business away from their firm… can you?
At the least, I get to use TD, Fidelity, Schwab, Vanguard, and other firms depending on the fit for my client. The best part, is that we even get to maintain the relationship, in some cases, with the clients’ old firm… Merrill Lynch, Smith Barney, wherever they want. Can a BD guy do that? You know… pick the firm AND the product that’s most acceptable? I don’t think so. We get paid to do just that… it’s an exciting and conflict-free manner to handle the wealth that our clients have given us to manage and monitor.
You sell C-shares to your clients who are fee-averse without telling them what they are truly paying…. Not, however, when a fee-only advisor is watching.
You sell high-cost annuities to your older clients who don’t know better since you don’t have access to no-load annuity products… Not, however, when a fee-only advisor is watching.
We get to pick the insurance product that our clients use, and can pick from multiple agents, if we so choose. Have you recommended another agent or investment advisor when you don’t have the solutions or the ability? I don’t think so.
What about the selling agreements that must be in place for you to offer certain funds, annuities, or investment managers… aren’t you limited too?
Fee-only relationships are incredibly flexible – they provide referrals to the agents, attorneys, and CPAs that can do a fantastic job. We are the center of the financial lives of our clients, and the biased dually-compensated advisor should be avoided at all costs.
We are as conflict-free as possible. BD relationships are seriously flawed in favor of the compensation scheme favoring the choice and recommendation at the whim of the advisor. Any time compensation can be influenced by a suggestion or recommendation from a salesperson… caveat emptor.
That’s my take.
Nuff said.
C
[quote=Captain]I
That’s my take.
Nuff said.
C
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Thank you Jesus Christ Superstar.
I'd go tit for tat with you, but I noticed that you don't have the ability to answer any direct questions. I'll just pick out one point of your post and we'll see if you can address my concerns. I'm willing to bet that you don't have the ability to stay on topic and respond.
We get to pick the insurance product that our clients use, and can pick from multiple agents, if we so choose. Have you recommended another agent or investment advisor when you don’t have the solutions or the ability? I don’t think so. How do you pick the insurance product or even know if an insurance product is the best fit? In other words, where do you get your expertise? You don't have an insurance license. You don't take any continuing education. You don't sell the products. No insurance knowledge is required to become an RIA. How do you reconcile the fact that you have a fiduciary duty to your client, yet you don't need to even have a beginner's level of insurance knowledge. Based upon your unwillingness to address insurance issues, it is quite obvious that this describes you. I often recommend other insurance agents. I constantly send people to P&C agents. I always refer the health business to other agents, but I get cut in on the action. The same is true for my mortgage operation. I do no work for either. If you understood the insurance business, you would understand that there is no reason that I'd ever have to refer the business out for the lack of solutions or ability. The only exception to this is EIA's because my B/D won't allow their sale as an outside business. Therefore, if a client requested one, I'd have to send him elsewhere. You ask questions. I answer. Can you do the same?