Investors Give Best-Interest Rule Thumbs Down At SEC Event

There is more to it than simply comparing the fees paid on a front load investment versus a 1% AUM charge. This is about doing the right thing for the client and not selling products to them that aren't the right product for them. This goes to selling a person a variable life insurance product or annuity for which they get trailing commissions and cost the client 5x what they would pay for in term insurance when that is all they really need. It is about putting together a portfolio for a client that contains low cost ETFs from a variety of vendors instead of pitching proprietary funds from the broker dealer firm that have a 1.25% ongoing expense ratio. This is not to say that broker dealers are evil by any stretch. The products they sell can be valuable pieces of someone's overall portfolio. This comes down to just letting customers know the difference of someone engaged primarily in selling products and those that are just offering financial advice.

This article is like asking a bunch of Bernie Sanders supporters what they think of president Trump. It is so flawed in it's one sided discussion painting advisers with a halo ......... Let me use the Fisher quote. WE DO BETTER WHEN YOU DO BETTER...... really should say we never take our hand out of your pocket and the more you make the more we make but we always make 1% of your assets and that 1% is a taxable even went we take our fees out of your account. Of course a fee manager would not understand that a registered person does not get a bonus based on volume of sales but an insurance agent might since that would be illegal like getting a larger commission for selling things promoted by the brokerage which is also forbidden. Do the math, at a reasonable rate of return the break even between a front end load and a 1% fee is less than 5 years. If the client uses investments from one fund company the customer only pays that commission one time. If they are investing $1 million or more they do not pay any sales charge. The registered person that services their account typically gets paid 2/10th of one percent (non-taxable since it is an operating expense) to take care of the client per year versus the taxable 1% adviser fee. I doubt that the SEC is reading the comments to this bogus article so these comments are in vain.