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According to Wikipedia, the languages of India primarily fall into two major categories: Indo-European and Dravidian. According to the 2001 Census of India, individual mother tongues number in the several hundred.

You’re probably wondering what any of that has to do with ‘fee-only’ vs ‘fee based’ advisors? Well, that’s a good question, I bring it up to make a point.

Much like the languages of India, financial advisors (more and more these days) tend to fall into two major categories: Fee Based and Fee Only. And within these categories there are so many different ways to run an advisory business; the many different advisory factions kind of reminded me of the breakdown of different mother tongues found in India. (not too sure if this analogy worked… lol)

Keep it simple stupid

I want to try and simplify things here, so the average investor isn’t left with a headache when it comes to understanding the different terminology. But before I break down ‘fee based’ vs ‘fee only’ I want to refer you to an article I wrote last July that talks more to the differences in compensation, that I will lightly touch on here. Please read that post!

Continue Reading ““Fee Based” vs “Fee Only” Financial Advisors”

This is a piece I’ve been looking forward to writing for some time. And what does that mean to you? I’m really not too sure, other than it’s probably going to be a longer post than normal, so lets get to it.

But before we start I have to tell you… I’ve never sold a No Load mutual fund in my life so I ask that you bear with me. That’s an inside joke…

I’ve never sold a no load mutual fund because they are NEVER SOLD by financial advisors. I’ll explain why that is and a whole lot more on the list below…

Continue Reading “10 things you need to know about No Load mutual funds”

Sometimes I come across prospective clients that want to work with me, but don’t want to be charged advisory fees.

Either they are the kind of people that have an aversion to being charged any kind of fees or they’ve had a bad experience, after being charged a lot of commissions, somewhere in their investing past.

Inevitably, I still want to convert them to my way of thinking. I will go through the whole process of why I believe an ETF fee based approach is the best way to build an investment portfolio, but much of what I say will go in one ear and out the other.

(Please note I’m generally wary of these type of people and may not take them on as clients, as I understand my approach may not be for everyone)

Continue Reading “Trying to fight the good fight”

(I feel the need to write this post before getting to the top 10 things you need to know about Class C shares because I think its important to be as transparent as possible, especially, when writing about a product class that I use in my business.)

In a previous post back in July, I mentioned that sometimes I use C share mutual funds to build client portfolios. C shares make up less than 2% of my business, with the overwhelming majority of my client portfolios using ETF’s.

But, from time to time, I do come across prospective clients that don’t want ETF’s, for whatever the reason. Sometimes a prospect is fee conscious or is just very comfortable with mutual funds (usually the 2 characteristics go together).

Continue Reading “C shares and how they fit into my business”

Well today marks my triumphant return to the blog after a month away from the keys. All I can say is its good to be back and back with a vengeance.

I’ve spent the last few weeks cleaning up the blog and have made significant strides in resolving most of the technical issues that stopped me in my tracks. Like everything else in the universe, Chance favors will continue to evolve over time.

Lets get down to business…

Many posts ago I talked about offering up a series of posts on mutual funds. Well, I’d like to pick it up there. Over the next few days I will be offering a lot of information on the topic, as well as, links to other sites where you can get even more pertinent information.

Continue Reading “A Cost Comparison- The Real Cost of Mutual Funds v ETF’s”

Often there’s not much transparency when it comes to letting clients know how advisors are compensated.

Advisors and brokers often dance around the issue and are hoping clients don’t ask them that question.

I know that was the last question I wanted to hear when I worked in the bank. It was one of the reasons I knew I had to get out of there and needed to switch to a planning and fee based business model.

(To be fair, these days, most banks offer fee based programs although I’d say it makes up a minority percentage of their business)

Cut and dry issue

These days, for me, talking compensation (generated from client asset management) is a very cut and dry issue. The overwhelming majority of my clients fall into one of two ‘fee based’ categories:

Continue Reading “How financial advisors get paid”

The reason why the financial planning process works so well is because it aligns you and your clients.

The plan puts you on the same wavelength; you tend to work far more efficiently together. And here’s a real biggie…. there are far fewer trust issues to deal with, than if there is no financial plan in place.

Let me ask you a question: Have you ever had a successful relationship when there were trust issues, financial or otherwise? I’m going to say NO to that.

Here’s another question: What would you say, is a major problem that has plagued the financial services business for as long as I can remember? Trust.

Continue Reading “Fixing the alignment”