Don’t be fooled by the “financial adviser” nametags Wall Street brokerage firms have been pinning on the their commissioned brokers, to disguise the fact that they’re still compensated for hustlers sales and accumulating new assets on which they can charge excessive annual fees forever. Many of the “certified financial planners” (CFP) are “fees only” advisers, which reduces the conflicts-of-interest inherent when commissioned brokers act as advisers. But a large percentage of advisers still get some or all of their compensation from commissions, rebates, perks and undisclosed side deals.
Unfortunately, many advisers will not volunteer full information about the sources of compensation, credentials or training, even when requested. Moreover, we learned in one study that even a seemingly minor two percent fee of total portfolio assets may end up taking a huge chunk of the returns from a portfolio managed by one of these so-called professional advisers, money siphoned off requiring very little management effort by the “adviser.” (More)