Rekenthaler Report

The Individual Investor's Edge

John Rekenthaler

Lights, Camera, Action!
Investment professionals appear to have all the advantages. Their days are amateurs' nights and weekends. They are assisted by research teams, whether directly, in the form of analysts who serve portfolio managers and consultants, or indirectly, in the form of home-office support for financial advisors. Often, they have access to private-placement or institutionally priced investments that are not available to retail buyers.

Unfortunately, they also have customers. And customers expect action. What's the point of doing all that work if it doesn't lead to decisions? Switching from commission-based compensation to an account-based amount, or a flat annual fee, doesn't eliminate that question. If anything, it strengthens it. I paid you all year … for nothing?