Adviser Fees Flashcards

1
Q

Benefits of paying for adviser fees on an hourly basis

A
  • familiar or same as other professions
  • easy to understand and compare
  • based on actual work undertaken, the amount invested is irrelevant - cheaper for larger sums
  • fee cap can apply
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2
Q

Drawbacks of paying adviser fees on an hourly basis

A
  • can be seen as inefficient, or adviser “running up the clock”
  • may put clients off making contact or asking for advice
  • paid from personal funds
  • unknown total cost
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3
Q

Benefits of paying adviser fees as a fund based fee

A
  • can negotiate lower fees for larger investments
  • payment via provider if not from personal funds
  • incentive to grow funds
  • attractive for lower amounts/lower fees for lower amounts
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4
Q

Drawbacks of paying adviser fees as a fund based fee

A
  • difficult to predict each year
  • may not be in line with the service provided, not reflecting time spent or larger portfolios not generally harder to administer
  • extra charges may apply for other services
  • reduces potential investment growth
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5
Q

Benefits of paying adviser fees on a fixed basis

A
  • familiar or same as other professions
  • known cost
  • easy to understand and compare
  • amount invested is irrelevant - cheaper for larger sums
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6
Q

Drawbacks of paying adviser fees on a fixed basis

A
  • is fee justifiable?
  • paid from personal funds
  • may put clients off making contact or asking for advice
  • exactly what is included?
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