Advisers at risk over asset-based feesBY BEN COLLINS | THURSDAY, 10 JAN 2013 2:55PMAdvisers might need to change the way that they charge asset-based fees, which can create conflicts of interest, said finance consulting group The Fold. |
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David Woodall
CHIEF EXECUTIVE OFFICER, SUPERANNUATION
INSIGNIA FINANCIAL LTD
INSIGNIA FINANCIAL LTD
Facing his greatest test yet in metamorphosing MLC Super, Dave Woodall is adamant the juice will be worth the squeeze. Jamie Williamson writes.
The only good news I got about my investements in the GFC was that my adviser's fees had come down along with the asset values - thank goodness. Now that's what I call in my best interests.
It never ceases to amaze me that some people cannot work out that a set dollar fee will always equate to a percentage of a portfolio, regardless of how you dress it up. Its simple mathematics. Sorry folks, some people need to go back to primary school.
If advisers should not charge as a % of assets then the rest of the funds management industry should not do so either. Our firm divides an ongoing fee between strategy advice (dollar based) and investment / AA advice (% based fee). Our implementation fees are project / time based. For investments, you have to have skin in the game to build a clients portfolio. On the business side, would you rather have your fees increasing over time at CPI, or linked to the markets? I know what is more profitable in the long term.