Compensation and client wealth among U.S. investment advisors

Authors

  • Lukas R. Dean Department of Economics and Finance, William Paterson University
  • Michael S. Finke Division of Personal Financial Planning, Texas Tech University

DOI:

https://doi.org/10.61190/fsr.v21i2.4666

Keywords:

Fiduciary, Client, Conflict, Commission, Compensation

Abstract

This study uses disclosure data from 7,043 Registered Investment Advisors (RIAs) in the United States to examine differences in client wealth by type of compensation. Results suggest that firms charging commissions and hourly fees have a higher proportion of low net worth clients. Wealthier clients are more likely to be charged performance-based fees and fees based on assets under management. RIA firms that charge commissions are more likely to provide financial planning services in addition to investment advice. Results suggest that policy restricting compensation may impact the provision of advising services to average investors.

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Published

2012-06-30

How to Cite

Dean, L. R., & Finke, M. S. (2012). Compensation and client wealth among U.S. investment advisors. Financial Services Review, 21(2), 81–94. https://doi.org/10.61190/fsr.v21i2.4666

Issue

Vol. 21 No. 2 (2012): FSR Summer 2012

Section

New Original Submission

License

Copyright (c) 2012 Academy of Financial Services

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