Connect with us


Understanding financial adviser fees – Phuket Investor

Legacy Phuket Gazette



PHUKET: Let’s be upfront and say that while no one likes paying fees, there is no such thing as a free lunch, and I, as a financial adviser providing financial advice, along with those on Wall Street who create investment products all need “to eat”, so to speak.

That said, there is no reason for you to pay unnecessary or excessive fees for financial advice or investment products once you have a firm understanding of how financial advisers on Main Street earn their money.

Understand how financial advisers get paid

Financial advisers will usually follow one of the following compensation models:

Fee only

Financial advisers who are fee only will typically charge you a percentage of the account value they manage and they will tend to favor individual stocks, bonds and low-cost ETFs, because they cannot accept commissions from financial product sponsors.

That’s because fee only financial advisers have a “fiduciary responsibility” to choose investments which are in your best interest and not because someone is paying them a commission on an investment product. Just be aware that not all fee only financial advisers are the same, as some charge lower fees because they provide more basic investment management services, while others charge higher fees because they provide full financial planning services (a complete financial plan or roadmap, for example).

Commission only

Financial advisers who don’t charge a fee will usually receive commissions from transactions and/or from those who create the investment products they sell.

And while there are commission only financial advisers who provide excellent financial advice, many others are merely good salesmen whose advice tends to be driven more by how they are being paid rather than by doing what’s best for you, the client. For that reason, you can expect commission only financial advisers to steer you towards annuities and managed funds that pay them the highest commissions.

Fee based
So-called fee based financial advisers will charge you a fee and receive commissions on the products they sell.

This means they do not have a “fiduciary responsibility” to do what’s in your best interest and that may end up costing you more than what a fee only or even a commission only financial adviser would charge.

Hourly rates or retainer

There are also some financial advisers who charge by the hour or a set fee – often to complete a special project that would otherwise be too complex even for a retail investor who is accustomed to managing his or her own money.

What arrangement is best for you?

Generally speaking, going for a fee only investment financial adviser who does not take commissions from those who create investment products like annuities or managed funds will end up being a better deal for you over the long term as they will steer you towards low cost investment products rather than those with the highest fees or commissions.

Likewise, and even if you are an experienced do-it-yourself investor, there might be times when paying an hourly rate or a retainer will also make sense (a large or complex 401k roll-over for American investors). Just be aware that many fee only, as well as commission based financial advisers, will require a minimum sized account to manage before it makes sense for them to take you on as a full time client. However and even if your account balance is small, don’t be afraid to check with a financial adviser to see if some kind of arrangement can be made to assist you if you need help.

Finally, no matter what type of financial adviser you use, make sure you take the time to understand what services he or she is offering for the fees you are being quoted. At the very least, your financial adviser needs to provide you with a detailed service and fee disclosure form.

Fees create a reverse compounding effect and reduce your nest egg over time. The higher the fees, in general, the greater the hit and reduced account size.

Don Freeman is president of Freeman Capital Management, a Registered Investment Advisor with the US Securities Exchange Commission (SEC), based in Phuket, Thailand. He has over 15 years experience and provides personal financial planning and wealth management to expatriates. Specializing in UK and US pension transfers. Call 089-970-5795 or email: Call to discuss ways to reduce portfolio fees and get your account growing efficiently.

Keep checking our online Phuket Business pages, join our Facebook fan page or follow us on Twitter @PhuketGazette for local and national business news.

— Don Freeman


Get more from The Thaiger

📱 Download our app on Android or iOS
👋 Have your say on our Thailand forums
🔔 Subscribe to our daily email newsletter
📺 Subscribe / Join YouTube for daily shows
👍 Like/Follow us on Facebook
🐦 FOLLOW us on Twitter
📷 FOLLOW us on Instagram


Join the conversation and have your say on Thailand news published on The Thaiger.

Thaiger Talk is our new Thaiger Community where you can join the discussion on everything happening in Thailand right now.

Please note that articles are not posted to the forum instantly and can take up to 20 min before being visible. Click for more information and the Thaiger Talk Guidelines.

Click to comment

You must be logged in to post a comment Login

Leave a Reply

Archiving articles from the Phuket Gazette circa 1998 - 2017. View the Phuket Gazette online archive and Digital Gazette PDF Prints.

Follow Thaiger by email:

Coronavirus (Covid-19)21 mins ago

Phuket Covid-19: 235 daily infections, 238 hospital beds available

Coronavirus (Covid-19)2 hours ago

Saturday Covid Update: 122 Deaths 14,109 new infections

Thailand18 hours ago

Oct 1 reopening NOT confirmed, Kpop star sparks frenzy for Thai meatballs |Thailand News Today

Welcome back to Thailand!

Thaiger is getting behind local businesses for the restart of tourism in Thailand - up to 50% discounts across all advertising packages!

Hua Hin19 hours ago

Final arguments Tuesday on dual pricing suit against Health Ministry

World20 hours ago

Texas lawyer dressed as Halloween’s Michael Myers to spread hurricane cheer

Thailand20 hours ago

The Last Dance feat. Mike | Thaiger Bites | September 17

Join the conversation on the Thaiger Talk forums today!
Thailand21 hours ago

No “October reopening” plan has been approved – CCSA

Thailand21 hours ago

Public Health Ministry defends October 1 reopening

Coronavirus (Covid-19)21 hours ago

Friday Covid Update: 14,555 new cases; provincial totals

Crime21 hours ago

Torture and forced disappearances bills pass House vote 368-0

Bangkok22 hours ago

Bangkok Governor: NO reopening October 15 despite PM plans

Pattaya23 hours ago

Thai-Russian 4 year old girl drowns in Pattaya home pool

Phuket23 hours ago

New centre proposed to provide ATKs cheap at Phuket entrance

Thailand23 hours ago

Morning Top Stories | Covid Free setting, Pattaya bars might not open | September 17 |

Thailand23 hours ago

Thailand Daily Covid Update | Thursday, September 17 |

Morning Top Stories Thailand | Police to end protests, Human Trafficking | September 14 | Thaiger
Thailand4 days ago

Morning Top Stories Thailand | Police to end protests, Human Trafficking | September 14

Thailand7 months ago

Thailand News Today | Thai Airways in rehab, All go for Songkran | March 4

Tourism7 months ago

Phuket’s nightlife. Yes, bars and clubs are still open | VIDEO

Phuket7 months ago

Thailand News Today | Covid passport talks, Thai Airways heads to court | March 2

Tourism7 months ago

Phuket Thai food treats you need to try | VIDEO

Thailand7 months ago

Thailand News Today | Bars, pubs and restaurants ‘sort of’ back to normal | Feb 23

Tourism7 months ago

In search of Cat & Dog Cafés in Phuket Town | VIDEO

Thailand8 months ago

Thailand News Today | Gambling crackdown, Seafood market to reopen, Vlogger challenge | Jan 21

Thailand8 months ago

Thailand News Today | Covid testing for visas, Business impact, Vaccine approval | January 19

Thailand8 months ago

Thailand News Today | Weekend Bangkok bombs, Thailand fires, Covid update | January 18

Thailand8 months ago

Thailand News Today | Stray car on runway, Indonesian quake, 300 baht tourist fee | January 15

Thailand8 months ago

Thailand News Today | Governor off respirator, sex-trafficking arrest, condo prices falling | January 14

Thailand8 months ago

Thailand News Today | Chinese vaccine, Thailand ‘drug hub’, Covid update | January 13

Thailand8 months ago

Thailand News Today | Bangkok may ease restrictions, Phuket bar curfew, Vaccine roll out | January 12

Thailand8 months ago

Thailand News Today | Covid latest, Cockfights closed down, Bryde’s Whale beached | January 11