Unpacking payments for investment advice
It's either commission or fees - and both structures have their pros and cons
Consumers seem to have wised up: fewer complaints are being made to the financial advice ombudsman and the pension funds adjudicator about the sale of high-risk investments to the vulnerable - such as widows and pensioners - by financial advisers motivated by exorbitant commissions. But with the threat of regulations that will cut their commission income, advisers are finding new ways of charging for their guidance. So, for example, many are charging fees based on the value of your investments under their advice - which still presents some conflict when it comes to getting the best counsel. If your adviser is willing, you may want to negotiate a fairer fee structure. These are the fee structures in use and what you should know about each of them: Commission Commission is calculated as a percentage of the amount you commit to investing or paying towards an investment or policy. Commission is paid to your adviser by the financial product provider, so although it appears as if the advi...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.