$5-$10m for 'fee for no service' seems absurdly low to me. I...

$5-$10m for 'fee for no service' seems absurdly low to me.

I think in the grand scheme of things it comes down to what is considered 'service'. Its open to interpretation.

Speaking generally, some financial planning firms consider clients being on the mailing list for their newsletter and market update while being able to call in if they need anything as 'service'. It was also previously perceived (and sometimes still is) that merely offering an annual review, not actually conducting one, is also service. My dentist, chiropractor etc offer me appointments all the time but they dont actually charge me unless I take it up, I dont see why financial planning should be any different. Id be ropable if I got offered an appointment, didn't take it up, but still received an invoice in the mail for the offer of the service.

Ive seen some fee disclosure statements read as follows:

Fee $xxxxxx

Services rendered:

Offer of Annual Review
Annual Newsletter
Market Update Email

Some of these advisers also have the tenacity to charge for advice if they client actually asks for it in addition to their ongoing fee of thousands of dollars. While some of the onus here should fall on the client, its hard to see an argument for the system to not be overhauled.

As time goes on, more dealergroups are switching off their grandfathered fees on their own accord if they can see no actual service was rendered for them (not just offered).