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

Need to invest $3K for the long term?

Dear Dr. Don, What's the best place to invest $3,000 for the long term? I'm interested in earning the best rates with low or no fees. Thanks, -- Cheryl Compounds Dear Cheryl, You've got (at least) three questions to... Read more

advertisement

Blog

Sheyna Steiner

Is your broker wrecking your retirement?

Skewed financial incentives for advisers can lead to less than optimal financial advice. What is the answer to conflicts of interest?  ... Read more

Partner Center
advertisement

Connect with us