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Financial Happenings Blog
Sunday, November 07 2010

The Fairfax newspapers ran an article - Sharp end of the stick - on Saturday highlighting fees being charged by financial advisers.  Since A Clear Direction Financial Planning was born in 2006, the mandate of the firm has been to provide clients with cost effective access to the best available portfolio investment solutions.  From the beginning we have avoided receiving commissions of any type and if we had to receive those commissions we have rebated them back in full.

The Fairfax article suggested some benchmarks for the fees being charged by advisers in the new era of commission free investing.  We thought it was an ideal time to see how this firm stacks up against those benchmarks for a $100,000 portfolio.

Administration Service Fees
Article - 0.80%
Our preferred service - 0.34%

Investment Manager Fees
Article - 0.80%
Our preferred investments - 0.40%

Adviser Fees
Article - 1.00%
Our fees - 0.55%

Article - 2.60%
Our fees - 1.29%

A few points to note, our preferred arrangement is to negotiate a flat annual fee with clients.  For clients with smaller balances this annual fee is prohibitive so we apply an asset based fee of 0.55% for starters.  We also try to get clients to manage their own cash where possible and do not charge an asset based fee on that amount.

Cost is definitely not the only consideration when choosing a financial adviser, far from it but it is an important aspect.  We are confident that we offer a really cost effective portfolio solution for clients who are looking for this type of service.


Posted by: AT 07:56 am   |  Permalink   |  Email
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