But that's not quite what the banks have in mind. Thus, Aite concludes in its report that banks and brokerage leaders need to agree on what makes an ideal bank financial advisor and modify the existing compensation system to reward the ideal person.


'Sympathy Pricing' Leaves Brokers Feeling Sorry
It's a nice gesture by advisors: When times are tough andthe markets stink, drop certain fees for clients to let them
know you feel their pain. Not a good idea, according to a study by Toronto-based consultant PriceMetrix.

The study, which focuses on transactional equity commissions, states that such sympathy pricing not only causes advisors to lose money immediately but also hurts in the longer term because they're not able to quickly reset prices when markets rebound.

PriceMetrix found that the average discount on commissions during the '08-'09 downturn jumped from 37% to 43%. Since then, advisors have had a mixed record boosting prices again--just 13% charge full price while half of advisors discount their commissions by at least 30%.

"[Clients] do not expect a discount when market performance is poor any more than they expect to pay a premium when market performance is strong, says Doug Trott, PriceMetrix president and CEO. "As such, advisors should be confident charging a fair price in bad times, as well as good times."

The study says that advisors who consistently priced trades during the past three years outperformed advisors who didn't.


Personal Capital Aims To Upend Investment Advice
(Bloomberg News) The Internet has changed how we pay our bills and apply for loans. What hasn't evolved as much is the relationship between wealthy individuals and their financial advisors, who manage their clients' holdings, take an annual cut of overall assets, and periodically offer updates in person or over the phone.

Bill Harris has a plan to bring this kind of personal wealth management into the Internet Age. A Silicon Valley veteran and a former chief executive officer of Intuit Inc.,  Harris has quietly worked for two years on a start-up called Personal Capital, raising $27 million. Harris said he hopes to create a new kind of financial-services firm catering to moderately wealthy individuals whose net worth, from several hundred thousand dollars to several million, is not quite fat enough to attract the high-priced investment advisors at Morgan Stanley or Goldman Sachs Group Inc.

"We want to bring personalized, high-end wealth management services to a part of the market that is fundamentally underserved," Harris said.

At the center of Harris' plans is a free Web site, personalcapital.com, that helps people track their finances and improve their portfolios. The company formally launched in September, and site visitors can register their various bank accounts, investment accounts, 401(k) retirement plans, mortgages and credit cards.

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