Fee based- The broker charges an annual fee based on a set percentage of the value of the client’s assets.
Commission based- The broker is paid by a third party based on the sale of products and services.
When we invest our clients’ money we do not base our decision on the compensation structure of the investment. We base our decision on how well the product will meet the client’s needs.
By limiting investments to only one type of compensation structure we would limit the availability of our investment opportunities. The reason for this is that some products are sold on a commission basis only and some are sold on a fee basis only. By limiting ourselves to either fee based accounts or commission based accounts we would miss out on many potentially beneficial opportunities.
We have found that the best strategy is to use a combination of fee based and commission based investments in order to supply our clients with the variety of investment options they require.