I can see that the recent posts on fee-based versus fee-only are generating some comments (both on this blog and on Jonathan Chevreau’s). Just to add a little spice to the mix: did you know that some fee-only planners charge a fee based not on investment portfolio size, but instead by net worth in total? Assuming that your fixed assets are larger than your liabilities, this means that the fee could be based on not only your portfolio size, but also on the equity you have in your house, cottages, real estate and incorporated entities, etc. Certainly this changes the game quite a bit.
There are some planners out there who may only deal with a few families, offer a very special level of service, and the value may in fact be there – think Tom Hagen to the Corleone family. :)
But, I think the main message is that there are a lot of options out there, and unfortunately the bulk of advisors do not go out of their way to bring clarity to the topic of fees. It’s tough painting with such a broad stroke, but the sad reality is that the deck is stacked against the average investor.