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Advisor Innovations: Rick Ferri's Contrarian Views on Financial Advice

Advisor Innovations: Rick Ferri's Contrarian Views on Financial Advice
wealthmanagement.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from wealthmanagement.com Daily Mail and Mail on Sunday newspapers.

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Can AUM-Based Advisors Be True Fiduciaries?


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. ....

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Editor's Letter: February/March 2021 | Wealth Management


A recent Twitter dispute between Larry Swedroe and Rick Ferri reignited the debate about financial advisor fees.
A recent dustup on Twitter between Rick Ferri and Larry Swedroe both well-known and opinionated financial advisors once again brought around the topics of financial advisor fees, how those fees are structured, what advisors actually do and whether they are paid too much to do it, or too little.
Both got their licks in, and clearly there is no love lost. Ferri, a well-known disciple of Jack Bogle and author of numerous books and articles on the superiority of index investing, claims that if financial advisors are to be true fiduciaries to their clients, they need to decouple advice from portfolio management and stop charging clients a percentage of assets managed because portfolio management is not where an advisor’s value lies. ....

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