This all-in cost includes mutual fund expense ratios, trading costs and adviser fee.
Credit Suisse First Boston, Warburg Dillon Read and Merrill Lynch: all have, of late, curtailed their reliance on trading in favour of fee-based income such as advice on mergers, which are booming (see chart).
However, the expense ratio does not include the last type of fee -- trading costs.
By taking the higher-risk strategy of owning the goods and reselling them rather than acting as a fee-based broker, Via Trading is positioned to benefit from high markups on goods such as tools, electronics and clothing.
Clearing houses enable the trading of shares between two parties, charging a fee to guarantee the sales should one side default.
Advisors typically collect higher fees for trading strategies, brokers collect more commissions, exchanges earn a fee from each transaction, and market makers gorge themselves on the bid-ask spread.
"You would pay a fee or a fine and it would give you economic trading rights in the richest part of the kingdom, " he says.
With respect to the allegation of churning, because we found no evidence of excessive trading and because (except as noted above) the accounts were fee based and thus not generating commissions compensation to Respondent Abadiotakis, there was neither indication of nor basis for an allegation of churning.
These fee-based activities account for 70% of its business, with futures trading accounting for the rest.
Asset managers earn a markedly higher advisory fee from active investment strategy and rightly so, since given the relatively more trading of assets, active investing incurs higher transaction costs but more importantly because active management relies on the skill of the asset manager which needs to be duly compensated with a higher advisory fee.
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Merrill copes by switching many clients to fee-based accounts, making its revenue a function of assets rather than of trading volume.
Others are more of the traditional "stock jockey" variety who are paid by commissions on trading activity, and possibly through what can be inelegantly but accurately described as kickbacks for selling particular products (fee-laden funds and annuities, for example).
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