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What fees do financial advisors charge?

Thursday 24th January 2002

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Q: I understand that some financial advisors charge a smaller annual management fee but compensate this by taking a % of gains made on a client's portfolio. If this is the case, where does the money come from? Is the client charged in dollar terms? Is there a transfer of a % of the client's portfolio into the manager's account?

A: Unfortunately this is not my area of expertise. I have heard of fund managers who take a % of the profits they make for their client instead of set fees. These are usually portfolio managers looking after a small number of wealthy clients with large amounts of money to invest. I suggest you read the section about Oliver Saint in the article Sweet Equity from Unlimited magazine published on ShareChat.

I don't know of any fund managers in the NZ market that offer this kind of fee structure. It would be nice if they did - performance of the fund manager rather than market performance seems sensible to me.

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