Two investors in the same mutual fund can receive drastically different value even though they are paying exactly the same fees.
One client will get incredible service and comprehensive financial planning. The other will get a confirmation of their purchase and little more.
Industry participants are well aware of this discrepancy in how clients are treated because the industry’s dominant fee structure encourages it. With most mutual funds, the cost of managing the fund as well as the cost of providing financial advice are lumped together. Investors normally don’t see what portion of the fee goes to rewarding their adviser for providing financial advice. As a result, clients have no way of knowing if their adviser is providing fair value… Read more