Even though it’s too early to have any hard data, I’ve been hearing troubling reports from advisors I know and in some online chat rooms about advisors who had converted to all-retainer compensation. Contrary to what you might expect, the word I’m hearing is that many are struggling in this market downturn.
As I understand it, the problem is client perception: As portfolios shrank—as much as 50%—the retainer fees to the advisors obviously didn’t. That meant not only did advisors not financially share their clients’ pain, as a percentage of assets under management, their compensation actually went up.
I know, I know, their comp didn’t really go up, but apparently the mere appearance of an increase was enough to set some clients off.
Entries (RSS)