Just a short note this week, but we wanted to give some examples of one of the core principles that drew us to &Partners: fee transparency.
&Partners maintains relationships with a broad set of asset managers to help ensure that advisors can source the best management for their clients. On top of that, they also help ensure that their advisors have clients invested in the most cost-effective fund share classes.
A bit of background: share classes emerged to allow asset managers to sell the same portfolios but sell them in different ways. “A” shares paid advisors an upfront fee, “C” shares paid advisors an ongoing fee. Other share classes cropped up that could be placed in managed accounts with lower expenses, but the advisor was paid nothing from the asset manager. In many cases, asset managers also created different classes of funds that had even lower expense ratios. Same portfolio, same manager, but very different costs depending on the share class.
At &Partners, mutual funds are reviewed to help ensure that clients are in the most cost-effective share class and if they find one, it is flagged to the advisor, and in tax deferred accounts, they can automatically make the exchange. We think this is awesome, the right thing to do for the client – part of our broader firm culture.