Fee-Based is a fixed percent of management fee. No commission will be charged. The concept of fee-based compensation was once introduced from the developed Western countries. Nowadays, about 25% of CFPs are commission-only, 23% are fee-based, 41% are using the combination of fee and commission) and the remaining 11% receive their compensation through salary or some other method Fee Based Investment Advisor works solely for their clients' best interest. They do not accept commission or receive any comp ensation for recommending specific products. This enables clients to receive completely unbiased investment recommendation from their Investment Advisors. Some of the advantages of using Fee-Based
trading platform are identified as followed:
¡§ If you have more than $50,000 to invest, you should fire your broker and find an investment advisor. Brokerage firms would like you to think they perform the same functions as investments advisors.¡¨ ¡§Financial planners ¡Ksubmit their work to peer review and are not supposed to charge anything but a fee ¡¨
Former Securities and Exchange Commission (SEC) Chairman
Arthur Levitt
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A Life Relationship with clients
The advisor fee will be directly proportional to client's total asset value, therefore conflict of interest between financial advisors and their clients could be minimized, result in a win-win situation for long term relationship. They will help their client to formulate highly personalized investment strategies based on their investment goals and pre-determined risk.
Maximizes Wealth
You can enjoy the freedom of fund switching without commission. This offers you flexibility. You can make your fund portfolio strategically geared towards the latest market conditions to enhance your overall portfolio performance.
Comprehensive advice
The advantage of fee-based charging structure is to minimize any conflict of interest between financial advisors and their clients. Under this charging structure, financial advisor will tailor-made investment portfolio for their clients through effective asset allocation, diversification, regular rebalancing and fund selection.
Objective Assessment
In most cases, fee based advisors see themselves as financial planners because of the wide array of advice they give on all kinds of financial planning issues. Commission based advisors (stock brokers) usually limit themselves to investment advice.
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