John Rekenthaler, vice president of research for Morningstar argues
people should be focusing on mutual funds' new fee structures instead of fee levels. The commission-based model was clearer, Rekenthaler says, when mutual funds front-ed sales charge could be printed in the prospectus. Now that fee and asset-based charges are becoming the norm, prices can vary widely from 0.5% to 1.5%.
With advisors bundling many services into their price outside their low fees and higher fee advisors who provide only one service of asset management, the prices aren't clear and it makes the market far less than efficient, Rekenthaler arguest.
A veteran observer of the industry, Bob Veres, surveyed 1,050 planners and found these interesting results:
"It is highly unlikely that a client with $2 million in assets to manage would pay the same exact quarterly AUM fee to any two advisors who participated in the survey."
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