investing

Fee-based or fee-only financial advisers?

Is changing the terms the solution?
Is changing the terms the solution? © Syda Productions/Shutterstock.com

Anything that confuses investors about how an adviser is compensated is counterproductive to good financial planning, Lemoine says.

"Transparency builds trust -- not only between a client and financial service professional, but also between consumers and the industry as a whole," he says.

He says the term fee-based can be misleading, and believes more precise terminology that clearly identifies how an adviser is compensated can help "demystify the planning process."

Scott would like to see labels changed to something more transparent. He says advisers should be characterized as being compensated by "commission," "commission" and fees" or "fee-only."

Unless and until such changes become widespread in the industry, advisers have the burden of helping investors understand the terminology, Scott says.

"It's an uphill battle," he says.

advertisement

          Connect with us
advertisement
CD & INVESTING NEWSLETTER

Learn the latest trends that will help grow your portfolio, plus tips on investing strategies. Delivered weekly.

CDs and Investment

How do I repay IRA loan?

Dear Dr. Don, Hello, I read your column about short-term, 60-day loans from an individual retirement account. How do you withdraw funds from an IRA? Can a person redeposit the funds back into the same IRA? Or can the money... Read more

advertisement

Blog

Sheyna Steiner

The King may defect to Canada

Burger King is in talks to buy Tim Hortons and will likely join the list of corporate expats. What does the tax inversion strategy mean for investors?  ... Read more

Partner Center
advertisement

Connect with us