Tags:
Most investors do not know that the financial industry is dependent on commissions. For a federal court ruling has caused a furore in 2006. The chief judge has ruled that all fees that are pocketed a money manager or investment adviser, the client must be reimbursed back. The customer has the option to abandon the so-called kick backs - so that a waiver is valid, it must be able to estimate the amount of the so-called retrocession. Banks and asset managers, many professionals refuse to give their customers information about the secret payments. Trailer fees are paid by product companies and to external asset managers by the Custodian. Viewed over all financial products flowing around half of the management fee of one investment product sales. One recent study estimates that there are an average of 0.65% for investment up to 0.7% of invested capital, which flows to the asset manager - and every year. For structured products, the returns are likely evenbe higher. Often also completed commissions are paid. Asset managers negotiate with their custodian banks on special terms which are only about half as high as usual bank fees for private investors. If the administrator of discounts on brokerage commissions, custodial fees and foreign exchange management is not fully to its customers, he receives from the Custodian, the difference with every transaction. Commission should provide incentives: If a money manager wants, he can participate in high bank charges. Incentives always lead to goal conflicts. The asset manager can pay by two parties with different interests. The Bank has the objective of the highest possible revenue, the customer wants low equipment costs. Compounding this conflict of interest by two factors: fees and commissions in the financial sector is not transparent and the advisor has money to its customers a huge knowledge advantage. A truly comprehensive advice is only available for a fee: Because product-advisory feescause, for example, the least "product consultant" to advise a purchase in the pension fund or to repay the mortgage. Corey Ribotsky Under such a proposal does not flow kickbacks. Demonstrably independent and neutral can act, a financial advisor or asset manager, if he can pay only by its customers or take at least obliged to regularly commissions received on account. The customer pays a consulting fee and I know for sure that it will not sell (expensive) products. Anyone who spends money for investment advice, but should be confirmed prior to each event that he gets back all reimbursements from the consultant - the retrocession of a possible future asset management.