Just Compensation

Categories: Company Management

Fair compensation. That's it. You hear the term bandied about in court cases where someone slipped on a banana peel at a McDonald's (do they even have bananas there?) and their lawyer demands just compensation to accommodate the pain and suffering of Moe, Larry, or Curly...whoever they're defending.

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Finance: What is Compensation: Advisory ...2 Views

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Finance a la shmoop what are advisory fee limits? well they're basically a

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price ceiling above which financial advisors can't go yeah I can't go they [Financial advisors in an elevator and hit price ceiling]

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can't touch that ceiling you know like hammer time, can't touch this...

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so when you invest in a mutual fund you pay two fees there's a commission

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and there's an annual management fee usually based on the assets you have

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with them under management like maybe it's one percent on the first hundred [Asset rises]

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grand that you have and then half a percent above a million or whatever

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but there is a third and insidious fee element in the world called advisory

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fees like how do you choose which fund to buy well if you have a financial

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advisor they'll walk you through the lists of mutual funds out there and [Ice cream flavors appear]

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index funds and all other set of funds as well well they're like a gazillion of

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them and then that advisor will charge you for their time in some form right

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someone's got to pay for their beach house well if you start adding up all

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the fees you're paying for arguably no better performance than had you just [Itemized list of fees appear]

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logged onto schwab.com or fidelity.com and bought an index fund hmm

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well then you're gonna start to pause here it starts to be a big number in

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those fees that eat meaningfully into your investment returns most buyers of [Pacman fees eating up money]

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mutual funds are not financial gurus yeah not like that they're doctors and

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lawyers and plumbing parts distributors and they really don't have a

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sophisticated understanding of just how badly they could get taken by

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unscrupulous financial advisors so the industry placed a series of structured

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limits to keep the non gurus safe from the financial predators when it comes to

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compensation and fee limits you know on advisory services and predators like [Tiger walking by]

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this guy

Find other enlightening terms in Shmoop Finance Genius Bar(f)