NAIFA President tells WSJ how commission-based services can be preferable over fees

In a Wall Street Journal column by Personal Finance Deputy Editor Karen Damato, NAIFA President Juli McNeely is among the advisors who say consumers can be well-served by choosing to pay their finance professional a commission over a fee.

In her column, Damato reports three reasons to pay commissions, not fees, to a financial adviser:
  • It will cost less in some scenarios. In some cases, a fee would be larger than the actual return. And, commissions could be less expensive for those who mostly manage their own money and are looking for just the occasional advice.
  • You have a small account and can’t find a fee-only adviser to take you on. Some advisors who work on a fee-only basis may not want business from investors who can’t afford a high minimum. “What do we do with the individual who doesn’t have that amount of money to invest?,” Juli McNeely asks.
  • You have an adviser you like and trust who does business by commissions. “Many current advisers operate in that commission-based world, and many American consumers already have an established relationship with those individuals,” Juli McNeely tells Damato. She adds that “a key factor” is the personal connection between the adviser and the client, and those clients know how their advisers are paid. 
  • Posted February 18, 2015 IN

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