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Can AUM-Based Advisors Be True Fiduciaries? During a recent Inside Wealth panel, advisor Rick Ferri argued that AUM-based advisors aren t incentivized to put clients first, while attorney Max Schatzow stressed advisor compensation for value isn t easily quantified. Either way, advisors should expect more client scrutiny over the price of advice.
Financial advisors who charge clients a percentage of assets under management are too often susceptble to conflicts of interest between their business model and what s best for their clients, argued Rick Ferri, an investment analyst and founder of Ferri Investment Solutions.
For services other than portfolio management, an AUM-based fee can be incompatible with being a true fiduciary, Ferri argued during a panel discussion at this week’s Inside Wealth Virtual Conference.