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
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
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
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
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
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?