Many commission-based clients reject the idea of fee-only plans, despite the public debate surrounding the Department of Labor’s fiduciary rule, according to a J.D. Power study.Almost 60% of investors using commission accounts
said they would “probably not” or “definitely not” switch to fee-only plans, even after being told that many advisers and investors see the latter option as better, the research and consulting firm found earlier this month.
The data calls into question the view that market forces stemming from the DoL rule have made its possible repeal a moot point
. Yet past J.D. Power reports have revealed that fee-only clients are more satisfied than clients whose brokers earn sales and performance payments.
The subtlety of commission-based clients’ perceptions about the fees they pay comes through in the findings of the latest study, its author says.
“I don’t necessarily think they support one side or the other in terms of the rule. What they reinforce is that what clients want is transparency and flexibility,” J.D. Power wealth management practice director Mike Foy says in an email.
J.D. Power quizzed more than 1,000 full-service investors online last month, with 449 of the investors reporting that they pay some form of commissions. The firm also interviews more than 6,000 clients each year to gauge their level of satisfaction with their adviser’s services and expenses.
To find out more on the opinions of commission-based investors, click through our slideshow.