(07-31-2019, 12:46 PM)Predator Wrote:

(07-31-2019, 11:51 AM)mikesez Wrote: Fee-based means you accept some commissions, but most of your compensation is fees.
Fee-only means you do not accept commissions at all.

If you were fee-based and disclosed your commissions, you wouldn't have needed to have your clients sign a form.  You could have still called yourself a fiduciary.

So what was the problem then? 
You weren't fee-based? Or did you not want to disclose what you receive from third parties?

Because the DOL fiduciary rule required a client sign a form that would allow commissions to be charged. Why can't you understand that concept?

I can't believe I am arguing financial management with a guy who talks about "impersonal" mutual funds and then his explanation only shows that he doesn't even actually understand what a mutual fund is.

I think he's asking about commissions that investment advisors receive from third parties and do not disclose to their clients.  

I see it everywhere.  For example, Merrill Lynch advised someone I know to buy General Motors bonds.  I read the prospectus for those bonds, and Merrill Lynch was underwriting those bonds, and they had an agreement with GM that they would market the bonds.  But they didn't disclose that fact to the client.  I really like Merrill Lynch and the services they provide their clients, although I do not use them myself.  I am educated enough to be self-directed.  But shouldn't they be required to disclose that they are being paid to push those bonds?  

The company I worked for had a 401k plan, and we had an independent advisor helping us run the plan.  He did not disclose that the plan he advised us to use was paying him commissions to push their plan, until I asked him directly whether this was the case.  He was under no requirement to tell us.  

Another thing I really hate about investment advisors is when they charge a percentage, like 1%.  That is a total ripoff.  Over a long period of time, that investment adviser will be taking about a fifth of your returns.  I know a person who has an investment adviser who charges that 1%, and in his case, that means he's paying this guy many tens of thousands of dollars a year to handle his money.  Managing money is not so hard that it's worth $100,000 PER YEAR for someone to manage it.  It's a ripoff.  

There are a lot of good investment advisers out there, but there are also a lot of parasites, and they prey on the ignorant.

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