Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
The age old argument of fee-based financial planning -vs- commission based planning has been beating to death. However I hope to prove that one can feel completely safe that a client's investments are not being compromised by commission based financial planning. Here are some examples of real world commission based advice that people have no problem getting advice from. If it's financial planning some how it's looked upon as different. Whether you are getting paid a fee and having to meet quotas or being paid commission either way it's still advice and there will always be a conflict of interest,it's up to the consumer or client to find a rep. or broker that has a well established practice or clientele.
Commission based advice:
-Auto Sales
-Home Sales
-Insurance Sales
-Electronic Sales(t.v's, home theater)
-Home Appliances and Furniture(best buy, american)
-Contractors have a certain conflict of interest.
-Any clothing store(jos a bank, express, mens warehouse)
Fee Based advice:
-anything you can buy off a shelf
-an "unbiased" financial planner
The Point is we get a lot of advice from many different professionals and we have no problem trusting them so why should financial services be any different. If you have a problem paying someone a comish, then welcome to etrade or scott trade. I work as a financial Planner and I have no gray line of clients best interest, I do what's best for the client at all times and if he or she still want's to pursue what I adivse against I have them sign the appropriate form.
The age old argument of fee-based financial planning -vs- commission based planning has been beating to death. However I hope to prove that one can feel completely safe that a client's investments are not being compromised by commission based financial planning.
Commission based advice:
-Auto Sales
-Home Sales
-Insurance Sales
-Electronic Sales(t.v's, home theater)
-Home Appliances and Furniture(best buy, american)
-Contractors have a certain conflict of interest.
-Any clothing store(jos a bank, express, mens warehouse)
Thanks for proving the point that commission based advice is untrustworthy. Who in their right mind EVER relies on a sales person for advice on what is in their best interests? You might use them as an information source provided you verify the information. The kind of people that the sales person is acting in the buyer's interests are the kind of people always getting taken for a ride.
I don't need anyone's advice on what car I should drive, what clothes to wear, or what kind of TV or dishwasher to buy. I'll do my own math and risk calculation on insurance, get multiple quotes from any contractors, and hire a buyer's agent when house hunting.
So... do you have any examples where commission-based advice is safe and reliable?
So... do you have any examples where commission-based advice is safe and reliable?
So no one who works on comish is trustworthy and honest? or just majority ?
I must be the 1%er, I used to sell cars and I always did what was in the best interest of my customers. I even told a guy not to buy a car, he was going through a divorce and just took over a house payment and his kid. He had 60,000 miles on his ford taurus and he said the only reason he was looking at cars is b/c someone had told him 60,000 miles was a lot of miles and he should buy a new car. So I told him "I'll sell you a car if you want but if the only reason that you want a new car is b/c someone said cars breakdown at 60k and your strapped for cash I won't sell you a car I'll grab another salesmen from the floor." He left and 18 months later when the dust had cleared and he got his financial house in order...he bought a car from me and my boss ate his words. Oh I also sold 8 of his friends cars b/c of the way I treated him. Life lesson learned. I got paid comish on it, you see if you do good work you won't need to worry about the comish or rip.
I work as a financial Planner and I have no gray line of clients best interest, I do what's best for the client at all times and if he or she still want's to pursue what I adivse against I have them sign the appropriate form.
You are swimming upstream here. Anyone who is paid a commission is by their nature, working in their own best interest. You can scream at the top of your lungs are you have a fiduciary responsibility to your clients, but your job description states otherwise. You probably have a Series 6, 63 or 7 license which means you only get paid if you sell high commission products to clients. You get some trailing 12b-1 fees on securities, but the real money is from new sells of annuities, life insurance or loaded securities. What you say does not match what you do. To avoid confusion, acquire the Series 65 and go to work for a Registered Invesment Advisor firm. You are then required to have the clients best interest at heart. My 2cts worth.
So no one who works on comish is trustworthy and honest? or just majority ?
That's not what I said. I said, from the buyer's perspective, they cannot rely on the advice of commission based sales people to be in their best interests. Maybe you looked out for your customers. Maybe lots of others do, too. But the customer cannot tell one from the other, until after the fact. There's a reason most people view salesmen as scum - they've probably been burned before. Most smart consumers learned the hard way.
That's not what I said. I said, from the buyer's perspective, they cannot rely on the advice of commission based sales people to be in their best interests. Maybe you looked out for your customers. Maybe lots of others do, too. But the customer cannot tell one from the other, until after the fact. There's a reason most people view salesmen as scum - they've probably been burned before. Most smart consumers learned the hard way.
The problem with brokers working on commission per trade is as simple as can be: it is in the broker's financial interest to trade, whether or not that happens to be in the investor's interest. It is an ongoing relationship, unlike with a car dealer, who is going to attempt to make one sale to you every few years or so. The broker is supposedly trying to build your wealth, but in fact, his or her interests are not squarely aligned with the client's.
While the car dealer isn't on your side, at least anyone with sense knows good and well that this is true. The stockbroker represents him or herself as the investor's advisor and ally. But does the broker send the client into no-load funds (for example)? Absolutely not--the broker doesn't get a good commission from those.
But does the broker send the client into no-load funds (for example)? Absolutely not--the broker doesn't get a good commission from those.
Wrong I have in the past, I have also turned down money b/c it didn't make financial sense for the client. I always tell my clients what I make if they want to know.
Wrong I have in the past, I have also turned down money b/c it didn't make financial sense for the client. I always tell my clients what I make if they want to know.
Maybe you're one of the few honest ones. Even the worst of businesses have them--but a few good apples does not make a barrel of rotten ones edible.
Maybe you're one of the few honest ones. Even the worst of businesses have them--but a few good apples does not make a barrel of rotten ones edible.
True, however unless your wealthy you cannot afford a personal advisor so joe six pack is going to have to do his homework on the firm and the rep.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
