Most online brokers, like Schwab, TD Ameritrade, and E-Trade, just reduced their trading commissions to zero, down from the $3-$6 per trade and way down from “the good old days” when trading commissions averaged $30-$50.  The stocks of these online brokers immediately dropped about 25%

Don’t feel too sorry for them!

The brokerage business is full of stated fees and also hidden fees.  For example, expect to see new annual account fees of $200-$500 per account.  Expect not to see such fees as increased “kickbacks” from mutual funds.  Expect not to see “mark-ups” on bonds, which means buying a bond for $950 and selling it to the client for $1,000, for example.  They are so clever.

The National Association of Personal Financial Planning (NAPFA) does not allow its Registered Advisors to accept any hidden fees.  They only get paid one number with no hidden fees.  This is called “Fee Only” and I think it is similar to the Good Housekeeping Seal of Approval.  Plus, they are held to the Fiduciary Standard, which means the client’s needs come first, before the advisor’s needs and before the custodian’s needs.  The client’s needs come first, period!

Now, why would anybody use an advisor who is not a NAPFA-Registered Financial Advisor?