Quote:
Originally Posted by MikePgh
An SEC registered advisor is obligated to act as a fiduciary and in their clients best interest. However that does leave the door open for them to share in commissions known in the industry as 12-b1 or advertising fees. These fees are charged by the mutual fund companies.
So while your advisor may say they are fee only, you need to ask if they share in any commissions. They should also be providing you with their form CRS (Client Relationship Summary) which spells out how they are compensated.
A lot of “fee only” advisors find other ways to get paid. You need to ask.
That certain national Advisory Firm that says “we’re different “… no they are not. They are a fee only advisor. Just like the thousands of other across the country.
Ask for the form CRS and read it. Then ask these questions
Do you share in any commissions or loads?
Who makes the decisions on where my money is invested? Is it your firm or do you outsource the portfolio management?
How many advisors will be familiar with my personal situation? Do I have a team or just you?
Is your firm independent or part of a larger national company?
What is your succession plan?
Mike
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Note that some mutual funds, like Vanguard funds, do not have 12-b1 fees. Read the prospectus. The 12-b1 fees must be disclosed in the prospectus. Another important thing to look for is the expense ratio. Vanguard funds have extremely low expense ratios as compared to the industry averages, especially for index funds.