The Merits of Fee-Based Management


Five key reasons why fee-based management has great merit:


No pressure to buy or sell investments. Investment brokers are sometimes guilty of “churning” – pressuring clients into buying or selling so that they can earn a commission linked to a transaction. Fee-based management mitigates that threat. 


No conflict of interest. Full-commission brokers are sometimes encouraged to “push” certain investments. That may be good for the brokerage and its employees, but it may not be good for you. Under fee-based portfolio management, the emphasis is not on product sales, it is on investment performance.


The investor and the advisor share the same goals. Through fee-based portfolio management, the advisor is paid from the assets that they manage. It benefits you to increase your net worth and achieve your investment objectives, and it also benefits the advisor as part of their compensation relates to the performance of your portfolio.


The investor and the advisor stay in touch. At a brokerage, financial consulting may be offered to a client once, and then never again. Fee-based portfolio management promotes continual communication between the advisor and client – a real relationship.


Wealth management becomes the true priority. Fee-based management promotes a clear, holistic approach that addresses many financial issues and needs.