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I don't understand how a financial company can charge an arbitrary amount (of their choosing) if the fund is doing well. How can anyone trust them to not take a
by hamstercat 9y ago
I don't understand how a financial company can charge an arbitrary amount (of their choosing) if the fund is doing well. How can anyone trust them to not take an absurd amount if the advisor is crooked? I guess if every financial business does it you have no choice as a customer.
- vinceguidry 9y agoIt seems like the idea is that a hurdle is guaranteed to be met by the financial firm, and, so long as that hurdle is met, everything else is gravy. The firm could choose to take everything over the hurdle or share the surplus with the client for goodwill boost. It's not so much a charge as a bonus. It would look like a good deal to the client, who gets legibility and reliability, and for the firm, which can get a reward for its efforts.