Mentor RIA Consulting - Allowing you to focus on what you do best
RSS

Recent Posts

Sales Incentives: Who Really Pays?
Could an IRA Trust Work for Your Plan?
Is the Pandemic Changing Your Plans?
Form CRS: Prop or Flop?
Using 401(k) Loans for Short Term Liquidity

Categories

Clients
Compliance
General
Investing
Planning
RIA Business
Training
powered by

My Blog

Because They Can

One of the recurring themes we have seen in recent years is that consumers need protection because providers of goods and services may charge more than they should. That was a moving force in the somewhat successful attempts to add transparency regarding costs to workers’ 401(k) plans, imposition of some controls on payday lenders and, most recently, in the context of remarks concerning the high commissions received by annuity salespersons.

In these days of almost instant and widespread communication about almost anything and the ability for most of us to get information about pricing from a wide range of sources – think airline and hotel costs as examples – one might think that the days of overpriced products were on the wane. Although there are some clear exceptions, those days really are not at all over. For every industry and provider exposed to complaints and charges regarding pricing there are others that have been ignored, overlooked or have chosen to continue with their behavior regardless.

Charging what the traffic will bear is common for product purveyors and based on proven and obvious consumer behavior. People will pay, a great deal, to get convenience, an ego boost, or a good perceived as both scarce and desirable. In a hurry or without adequate knowledge, these same people will overpay on almost anything.

That is why, for example, in the investment advisory industry, we find some advisers trying to justify their one percent annual fees to their clients while others routinely charge double that or more for the same or lesser services. Human nature dictates that if you can do it, in this case charge a higher than average price for a particular product, you will. And why not? Most businesses are for profit and so will seek to maximize that profit so long as it does not cost them business.

If consumers want the best deal, then they need to do their homework to understand the products they are interested in, the varying pricing available, their bargaining points and so on. If you don’t, you may not be getting the deal you would prefer.     

0 Comments to Because They Can:

Comments RSS

Add a Comment

Your Name:
Email Address: (Required)
Website:
Comment:
Make your text bigger, bold, italic and more with HTML tags. We'll show you how.
Post Comment
Website Builder provided by  Vistaprint