Wall Street analysts sometimes describe a stock selling at a discount as a value trap. The price is lower for a reason, they say, because of problems that arent readily apparent.
Such can also be the case with RIAs who cut their fees. The difference with advisors is that they are setting the trap for themselves. Discounting to attract clients is a short-term solution to the deeper problem of a weak sales process. The long-term consequences can be a devalued brand and compromised operations.
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