After many years of market gains, consumer confidence is high. The market environment appears to be making investors brave and willing to take on more risk. Is now the time to take on more risk and are consumers investing as if they’re invincible? Have they forgotten how devastating large losses can be to a portfolio and how long and difficult it can be to recover?
In this edition of Envestat, we examined average client and advisor fees over the past three years by account size and distribution channel to answer some key questions:
• How significant is the fee compression?
• Does fee compression differ based on the size of the account?
• How are various wealth management distribution channels affected by fee compression?
While much has been assumed about fee compression in the investment advisory space, there has been little data available to help financial advisors and wealth management firms truly understand the marketplace. Guessing blindly about pricing trends has often led advisors to be concerned they are charging fees that are too high whereas firms may assume their financial advisors are charging submarket fees.