What is the difference between Fee-Only and Fee-Based advisors?

Compensation #3Dear Mr. Market:

Last week I had lunch with an old colleague of mine. It’s always good to catch up with others in the same profession but sometimes it also truly helps you understand why so many consumers are confused. Here’s a brief background and then a summary of an actual conversation between two financial advisors:

Both financial advisors began their careers working for major wirehouse firms (think Morgan Stanley, Prudential, UBS, Smith Barney, etc…). They each then worked at Charles Schwab as part of the Retail Branch Network and Schwab Private Client (SPC) group. Thereafter, Advisor #1 (who we will call Fee-Based Advisor) left Schwab to join one of the advisors that is in their Schwab Advisor Network program.  This is a network that has made certain firms wildly successful as Charles Schwab branch representatives get compensated to vector investors and Schwab account holders to meet with advisors who pay to be in their program. Advisor #2 (who we will call Fee-Only Advisor) is not part of any network and is not affiliated with any brokerage firm, mutual fund company, or insurance company. “Fee-Only Advisor” is a Registered Investment Advisor (RIA).

Fee-Based Advisor: So…how are things out there?

Fee-Only Advisor: Good…I keep plugging away but sometimes it’s frustrating to see how undereducated the general public is about this industry. Continue reading

Women Investors : Who Controls the Purse Strings?

Women Investing

Dear Mr. Market:

Did you remember Mother’s Day and get her something special?  As we celebrated Mother’s Day earlier this month we would not be surprised if Mr. Market didn’t do much for his mother or for women in general.  The financial services industry has been notorious for overlooking women investors however the ‘tides of change’ are quickly approaching and everyone needs to be aware of it.

Women have become a major power player and are making a huge impact in today’s financial world.  The statistics speak for themselves; here are some eye opening facts: Continue reading