When it comes to pricing, charging clients a percent of assets under management -- often around 1% -- remains the heavyweight champion of the independent financial advisory world. Yet the venerable model faces challenges from a variety of contenders, including variations on flat fees, hourly billing and charging on a percentage of other financial metrics.#32;

Financial Planning surveyed its readers to ask about compensation trends, their current structure and any changes they were making. We found some of the answers surprising. Page through to see the results, or click here to read our feature on the shifting compensation model. -- Charles Paikert editorial staff

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Ethel Sprouse has a difficult life. She is a baby boomer from Cedar Bluff, Ala. Her husband has Alzheimers disease. Her adult daughter is mentally disabled and lives in a group home. She needed a trusted financial advisory badly.

She turned to a registered representative of Allstate Financial. In 2007, she transferred all her life savings to Allstate. According to a recent report from the Public Investors Arbitration Bar Association, her nest egg was invested in a non-diversified portfolio of stocks. Mr. and Mrs. Sprouse lost approximately $400,000.

They sued Allstate in arbitration, and the case is currently pending. All of the Sprouses allegations need to be established at a hearing. Allstate has denied these allegations and is contesting them. Mutual Service Corp. and LPL Financial, which at various times also managed the Sprouses money, are named in the suit as well.

Allstates ads

Allstates iconic slogan, Youre In Good Hands, is one of the most recognizable in America. Its in the advertising Hall of Fame and is supported by massive advertising to reinforce its message.

What does that slogan mean to you? When it comes to financial advice, do you believe it conveys the impression that Allstate will put your interests ahead of its own? Otherwise, you might not be in good hands. Rather, you would be in the hands of a company that could take action not solely in your best interest.

Allstates legal position

An exhibit attached to the report sets forth Allstates legal position. Its sobering.

It derides the allegations against it as nonspecific and baseless.

It disputes the amount of the losses claimed by Mrs. Sprouse and her afflicted husband.

It argues that some of the losses were incurred when their Allstate representative left and joined another firm. The Sprouses account was also transferred to the new firm.

It denies any investments were unsuitable.

As indicated, these issues are contested and will have to be resolved at a hearing. However, Allstate also asserted the following:

Thus, any claim by Claimants based on a supposed breach of fiduciary duty fails as a matter of law. Investment advice provided incidental to and in connection with a non-discretionary account does not establish a fiduciary duty... As such, [Allstate Financial] owed no fiduciary duty to Claimants, and, therefore, no such duty was breached.

According to Allstate, being in good hands doesnt mean the company has an obligation to operate at a standard that places the interests of its clients above its own. And the Public Investors Arbitration Bar Association report concludes Allstate Financial is just one of many brokerage firms advertising like they offer non-conflicted and trustworthy advice that puts the investor first, but then deny any such duty when theyre called to account for their actions.

What this means

A fiduciary has a legal obligation to recommend products that are in your best interest. A broker who is not a fiduciary can recommend an investment product (like a proprietary mutual fund) that is merely suitable, even though he is aware of better, less-expensive funds.

If you really want to be in good hands, you should only entrust your hard-earned money to a fiduciary. Be sure to get it in writing!

Dan Solin is the director of investor advocacy for the BAM ALLIANCE and a wealth adviser with Buckingham. He is a New York Times best-selling author of the Smartest series of books. His latest book is The Smartest Sales Book Youll Ever Read.

The views of the author are his alone and may not represent the views of his affiliated firms. Any data, information and content on this blog is for information purposes only and should not be construed as an offer of advisory services.

  • EVR is a strong player in the independent financial advisory for institutions, but it is facing global headwinds affecting its share price.
  • Its management is committed towards cost containment even as it enhances the strength of its product offerings.
  • Income projection justify a price of at least $59 this year for EVR which means that the current price of $51 is undervalued with further growth potential.

Sauville, Wis. Gary Dunco, CFA, CFPreg;, CRPCreg;, APMAreg;, has become an Ameriprise Financial Private Wealth Advisor. Dunco, with an office in Brookfield, is one of approximately 10 percent of the nearly 10,000 Ameriprise financial advisors to achieve this status.

Dunco, a Saukville resident, is part of Dunco, Braun amp; Associates, a financial advisory practice of Ameriprise Financial Services Inc.

Ameriprise Private Wealth Advisors provide personalized client service and are dedicated to meeting the complex and unique financial needs of their clients. To become eligible for this status, advisors must be experienced in serving affluent clients, maintain high client satisfaction scores, complete specialized training and achieve superior business results.

As an Ameriprise Private Wealth Advisor, Dunco is focused on providing advice and financial solutions for clients with high asset levels. He is knowledgeable on a variety of topics and strategies including retirement, tax and estate planning, insurance and asset management.

Dunco, Braun amp; Associates is located at 16650 W. Bluemound Road, Suite 800, Brookfield. Dunco can be reached at (262) 785-1010 or via www.ameripriseadvisors.com/garybdunco.

At Ameriprise Financial, we have been helping people feel confident about their financial future for over 115 years. With outstanding asset management, advisory and insurance capabilities and a nationwide network of 10,000 financial advisors, we have the strength and expertise to serve the full range of individual and institutional investors financial needs. For more information, visit ameriprise.com or www.ameripriseadvisors.com/garybdunco.

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