Fight club: Commissions vs. fees

Fee-only advisers and commission-based brokers have been arguing for years over who has the best business model for clients. Reporter Mason Braswell’s story about how and why some commission-based brokers are resisting the trend, even in their own industry, toward the fee-only model set off a firestorm online that revived many of the old arguments.
“This article highlights the difference between a salesperson and a financial planner. Ms. Joseph isn’t a financial planner because if she was, she wouldn’t need to refer clients to an estate attorney for “broader financial planning questions.’” — Alan Moore
“If you can get a client to pay you a fee on assets managed, you are a salesman. You are no better than the used-car salesman down the block. You are not that wonderful. Take a look in the mirror. You are not better than anyone else who gets paid to give investment advice. Grow up, Mr. Moore.” — Guest
“Here’s why the fee model doesn’t work for her. She has 700 customers, zero clients. She can’t charge a recurring fee because she doesn’t have a relationship business. With 700 people, you can’t. Not even close. She doesn’t do jack for them, so she sure can’t charge them as if she did.” — loneMADman
“When anyone owns a business, you are a salesperson and a marketing person, too. You need to sell and market, no matter what type of payment you receive. I wish that people would get off their high horses and stop bashing registered reps or others who charge commissions. What matters is what’s best in the eyes of the client and to be transparent no matter what you sell.” — Coach Maria
“I don’t think of myself as a salesperson. Neither do you. But guess what … we ALL are. And your clients’ best interests can come first whichever model you’ve chosen to employ. “ — P. Rogers
“I’m a big cheerleader of the fee-only model but kind of understand the point of this article. Maybe that’s where the robo-advisers can step in, seeing that some charge 0.25% of AUM.” — Marty Morua
Go to InvestmentNew.com/models to read the full story and reader comments.