Quote:
Originally Posted by Mike Harte
Not quite so, Peter. Most "middlemen" that you mention usually charge a fixed percentage fee regardless whether that is for purchase or sale, meaning that their cut is lesser the lower the sale price achieved.
This is one of the myriad reasons that there has been behind the consolidation within the life assurance industry. As returns on investments saw investment funds either stagnating or even losing value, so their fees and charges reduced. This left many companies unprofitable.
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Hence me saying they don't really care, unlike the investors they still profit from a loss.
OK their income is reduced if the price goes down, which will have an upsetting affect on their bonuses etc. but their suffering isn't the same as the (now poorer) people they advised/encouraged...
The race to the bottom on fees etc. usually ends up with some companies becoming unprofitable, the question is who ends up bailing them out.