• “Fiduciary” and “Fee only” RIAs can still collect undisclosed commissions! More...

    Financial Advisors who are Registered Investment Advisors must act as Fiduciaries, where they are obligated to put clients interests first. However, the SEC and FINRA allow RIAs to also be dually registered with Broker-Dealer firms as Registered Reps. This affiliation allows the Advisor to legally collect commissions on the sale of investments to clients, including mutual funds, bonds, annuities, private REITs and structured notes. This selling agreement between the Advisors' broker umbrella and the mutual fund or annuity firm does NOT have to be disclosed to the client. This payment structure between the Advisor and the investment source happens without the clients knowledge. RIAs under a Fiduciary obligation also dually affiliated as Brokers can collect commissions on "markups" on over the counter bonds and stocks, while at the same time telling the client the trades were "no-commissiion". They aren't legally defined as commissions as there was no added fee and the broker traded as "principal" i.e., sold securities out of their own inventory at a "markup".

  • How much did your advisor earn in 2008 when the average investor lost 40%? Same as 2007. More...

    Quite often Financial Planners (FPs) and Advisors often take fees of 1-2% of the notional balance under management. But, that may not be all they’re making off of you, and when the real fees come into play, they may not even be required to disclose them to you. FPs and Advisors often put their clients money into mutual funds, rather than individual stocks or bonds , closed end funds (CEFs), and ETFs. Why are they buying only mutual funds on your behalf? The answer is that mutual funds charge "front end sales load" commissions of 1-5% and ongoing expense ratios of .5-1.5%. The FP or Advisor gets to pocket all or a portion of those fees as a commission for selling the funds, through selling arrangements via their broker-dealer affiliation. Advisors are NOT required to legally disclose what compensation agreements they have with mutual fund companies. Only the mutual fund prospectus, a lengthy complicated document, has to disclose the fees you are paying, which are both the front end sales load and the ongoing expense ratio. That information is deeply embedded in fine print in that document. Investing clients money in individual stocks, bonds CEFs, ETFs doesn't afford the Advisor the opportunity to earn these extra commissions, which can often be a multiple of the annual management or "wrap" fee which he only advertises to you.

    Sag Harbor Advisors does not invest client money in mutual funds, nor will accept commissions on investments placed in client accounts. Sag Harbor Advisors generates fees off of performance fee** agreements with small, or no management fees. (**Performance fees agreements are available to investors with a minimum net worth of $2,000,000, independent of the equity in their primary home, and an account balance of $1,000,000 or more with Sag Harbor Advisors.)

    Sag Harbor Advisors charges .5% on accounts with balances of $1,000,000- $3,000,000, along with performance fees of 12.5% of returns subject to minimum net worth requirements. Clients with balances of $3,000,000 or more may choose a pure performance fee only option of 20% of the return and no management fee.

  • Broker-Dealer affiliations create Conflict of Interest More...

    Quite often Financial Planners and Advisors take fees of 1-2% of the notional balance under management. But that may not be all they’re making off of you, and when the real fees come into play, they may not even be required to disclose them to you. FPs and Advisors often put the majority of their clients money into mutual funds, rather than individual stocks, bonds, CEFs and ETFs. The reason is the mutual funds charge “front end sales load” commissions of 1-5% and ongoing expense ratios of .5-1.5% which the FP or Advisor gets to pocket a large portion of, sometimes as high as 90%, as commissions for selling the funds. That’s where the Advisor/FP really makes money off you. And what’s more, HE DOESN’T HAVE TOP LEGALLY DISCLOSE THAT TO YOU. Only the mutual fund prospectus, a lengthy complicated document, has to disclose the fees you are paying, which are both the front end sales load and the ongoing expense ratio. That information is deeply embedded in fine print in the document. Financial Advisors who are Registered Investment Advisors must act as Fiduciaries, where they are obligated to put clients interests first. However, the SEC and FINRA allow RIAs to also be dually registered with Broker-Dealer firms as Registered Reps. This affiliation allows the Advisor to legally collect commissions on the sale of investments to clients, including mutual funds. This selling agreement between the Advisors broker umbrella and the mutual fund firm doe NOT have to be disclosed to the client. The conflict of interest arises when the Advisor chooses investment products for his clients. In our current zero interest rate environment, conservative fixed income investments pay very little fees, since interest earned is so low. The highest fee products remain in the equities arena, particularly aggressive growth funds. A strong incentive exists for the Advisor to place clients funds in investments disproportionately weighted towards equities, and particularly riskier stocks. In addition, other forms of investments, such as private REITs (Private Real Estate Investment Trusts) pay very high fees in some cases (10-15%). These are illiquid, non tradable portfolios of real estate assets which may not be suitable for clients requiring liquidity in the next 3-5 years. Can an Advisor who claims he is acting as a Fiduciary, truly act in accordance, while collecting commissions on the sale of investment products to his clients?



    https://www.wealthfront.com/blog/beware-rising-investment-advisor-fees/
    http://www.topgunfp.com/questions-to-ask/
    http://investment-fiduciary.com/2011/12/10/how-to-tell-if-your-financial-advisor-is-screwing-you/
    http://www.smartmoney.com/invest/stocks/10-things-your-financial-planner-wont-tell-you/#articleTab

  • Are you aware of the fees you’re paying to mutual funds for poor returns? More...

    Are investors aware of the amount of fees they are paying to mutual fund companies? Are they aware of the expense ratio, which is charged yearly, and ranges from .5-1.5% and often more? Are they aware of the one time front end load/ sales commission, which can be as high as 5%. With interest rates this low, and Fed Funds at zero for a period that could last through 2016 according to the Federal Reserve’s latest comments, can we afford to pay fees this high? Are investors aware these funds often yield little more than average market returns, or “beta” and fail to differentiate themself? Are investors aware they could just invest in exchange-listed ETFs, which offer much lower fees and are fully transparent, and can be bought and sold any time during trading hours?

  • Top Questions you need to ask your financial advisor More...

** Sag Harbor Advisors is a non-broker, fee only Advisor that can not charge commissions on the sale of investment products. Sag Harbor Advisors acts under a Fiduciary obligation putting clients interests first. Sag Harbor Advisors is one of the few RIAs offering Performance Fee compensation structures. **

Sag Harbor Advisors quoted in the Financial News

OTHER PRESS