Comments on: Reader Comment on Brokers http://allfinancialmatters.com/2006/11/09/reader-comment-on-brokers/ A personal finance blog dedicated to discussing such topics as budgeting, asset allocation, 401K, IRA, cash flow, insurance, financial planning, portfolio management, and other areas in personal finance. Sat, 11 Feb 2012 20:32:19 +0000 hourly 1 http://wordpress.org/?v= By: JLP http://allfinancialmatters.com/2006/11/09/reader-comment-on-brokers/comment-page-1/#comment-43362 JLP Thu, 09 Nov 2006 17:13:29 +0000 http://allthingsfinancialblog.com/2006/11/09/reader-comment-on-brokers/#comment-43362 LA Money Guy, Geez! I didn't even think about that wording being confusing. I went back and changed the A and B to 1 and 2. Thanks! LA Money Guy,

Geez! I didn’t even think about that wording being confusing. I went back and changed the A and B to 1 and 2.

Thanks!

]]> By: LAMoneyGuy http://allfinancialmatters.com/2006/11/09/reader-comment-on-brokers/comment-page-1/#comment-43358 LAMoneyGuy Thu, 09 Nov 2006 17:06:04 +0000 http://allthingsfinancialblog.com/2006/11/09/reader-comment-on-brokers/#comment-43358 What the commenter is referring to is the expense ratio, including 12b-1 fees, of A shares vs. B shares. In this case, the A shares are almost always cheaper than the B shares. I think your example wasn't meant to say A shares vs. B shares, rather MF X vs. MF Y, correct? In other words, two totally different MFs, but one pays a higher broker commission. So, I agree with you, but I understand the commenter's confusion. What the commenter is referring to is the expense ratio, including 12b-1 fees, of A shares vs. B shares. In this case, the A shares are almost always cheaper than the B shares. I think your example wasn’t meant to say A shares vs. B shares, rather MF X vs. MF Y, correct? In other words, two totally different MFs, but one pays a higher broker commission.

So, I agree with you, but I understand the commenter’s confusion.

]]> By: Finance Buff http://allfinancialmatters.com/2006/11/09/reader-comment-on-brokers/comment-page-1/#comment-43109 Finance Buff Thu, 09 Nov 2006 07:12:59 +0000 http://allthingsfinancialblog.com/2006/11/09/reader-comment-on-brokers/#comment-43109 "4% verses 4.5% doesn't take in consideration the internal cost which is higher on others shares vs. A shares" This part could be true, IF the fund family paying higher commission is American Funds, which has lower expense ratio than other typical broker-sold funds. We are not talking about load vs no-load funds here. Brokers sell load funds, period. That's how they get compensated. If someone doesn't know how to buy no-load funds or doesn't want to make their own decisions, buying American Funds from a broker is not bad, even if the broker gets a higher compensation from American Funds than say from Van Kampen. “4% verses 4.5% doesn’t take in consideration the internal cost which is higher on others shares vs. A shares”

This part could be true, IF the fund family paying higher commission is American Funds, which has lower expense ratio than other typical broker-sold funds. We are not talking about load vs no-load funds here. Brokers sell load funds, period. That’s how they get compensated. If someone doesn’t know how to buy no-load funds or doesn’t want to make their own decisions, buying American Funds from a broker is not bad, even if the broker gets a higher compensation from American Funds than say from Van Kampen.

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