THE ALPHAGLIDER BLOG
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The conundrums continue. Despite strong consumer and business confidence, economic activity is tepid. Q1 GDP growth was only 0.7 percent, and real personal income wage growth was only 1.0 percent. Right now markets are betting that economic activity will rise to meet the high levels of confidence. We hope the markets are right, but we have our doubts.
Fiduciary Rule or not, the commission-based business model of broker-dealers is under pressure. Today the Wall Street Journal reports that Merrill Lynch is moving away from commissions and lowering its maximum advisory fee by 18.5% for the 20% of its advisory clients which have sub-$1 million accounts. But at 2.2% of assets, Merrill Lynch's maximum advisory fee is still extremely high.
