August 2, 2010
I work daily with people that want and need advice, but they would not be willing nor able to pay fees for advice, as the fees to help people with small investment accounts would be too high.
Adding more paperwork for the Advisor to complete will not force an advisor to become more ethical. A person either is ethical or they are not, paperwork will only impede those of of who are trying to actually help the client.
If you want to do something, then make sure the prospectus uses plain language. That way the investor can actually read about the investment.
Giving a client the choice of fee-based or commision-based is a reasonable option. But fee-based only will cause people with small accounts to become ignored. Only the wealthy will get good advice, and you will create a department of ambulance chaisers who go after small accounts.