This is related to an earlier post regarding advisors choosing high fee funds so they can receive kickbacks. A commentator asked what should advisors charge. I gave a long answer then suggested 0.25% and then invest only in low cost index funds (no kickback funds).
Then today I came across this article. Apparently Vanguard and Schwab are already on top of this. The article points out that the “hybrid” Vanguard model charges 0.3% and invests only in low cost index funds.
So, I wasn’t too far off with the 0.25% suggestion. We will experience increasing competition in the financial advisory business. This article reveals some of the emerging competition already at play.