George Kamel Questions Advisor Fees When Portfolios Lose Value

Personal-finance commentator George Kamel is pressing a question many investors never ask their advisors: when a portfolio loses money, who absorbs the hit. "Who gets a pay cut? The advisors," Kamel said, according to a report from 24/7 Wall St. picked up by Google News.

The remark, as framed in the report, takes aim at the common practice of paying financial advisors a percentage of the assets they manage rather than a flat fee tied to performance or hours worked.

What did George Kamel say about financial advisors?

Kamel's quoted line singles out advisors as the party least likely to feel the consequences when a client's investments decline. The 24/7 Wall St. report does not specify a particular firm, fee percentage, or client case; it presents the comment as a broader critique of how compensation in the advisory industry is structured. Readers should treat the remark as commentary rather than a study with named figures, since no additional data points were included in the original report.

How do most financial advisors get paid?

The industry's dominant model charges a percentage of assets under management, often called an AUM fee. Under that structure, an advisor's income rises and falls with the dollar value of a client's account, but the fee is calculated as a rate, not tied directly to whether the account gained or lost money in a given year. Some advisors instead charge flat retainers, hourly rates, or commissions on specific products, each with its own incentive structure.

Why don't fees fall more when portfolios lose value?

Because AUM fees are a percentage, they do shrink somewhat when account values drop. Kamel's point, as quoted, is that the shrinkage is proportional and automatic rather than a deliberate sacrifice by the advisor. A client who loses a meaningful share of a retirement account still pays a fee on what remains, while the advisor's business model has not changed. The report does not quote any advisor or industry group responding to the criticism, so only one side of the argument is represented in the source material.

What should investors ask their advisor about fees?

Investors who want to understand their own exposure can ask an advisor directly how compensation is calculated, whether it is AUM-based, commission-based, or flat-fee, and whether that structure changes during a market downturn. Comparing the answer against a written fee disclosure, which registered investment advisors are required to provide, is a concrete way to verify the explanation matches the paperwork.

Where can readers find more on advisor costs?

The original 24/7 Wall St. report, relayed through Google News, remains the only detailed account of Kamel's remarks available at publication. Investors curious about how fee structures interact with specific holdings can also review HTT's separate explainer on investing in the Vanguard Utilities Index Fund ETF, which breaks down fund-level costs as a point of comparison against advisor fees layered on top.

Artiglio is A coming-soon iPhone chief of staff for briefings and drafts. Not on the App Store yet.