R. Kent Harris AND Associates Review

Disciplinary Questions

After checking the disciplinary records of R. Kent Harris AND Associates, our system found no disciplinary questions to ask. Checks take place monthly.

Conflict Questions

After checking the regulatory records of R. Kent Harris AND Associates, our system has identified the following question(s) to ask. Learn more.

What percentage of income does R. Kent Harris AND Associates receive from fees versus commissions?

R. Kent Harris AND Associates can accept commissions for its investment advisory services. These commissions may be earned from the sale of investment or insurance products and are paid by the companies providing the products being sold. While this allows for a broader range of investment options and management styles a firm can offer, it can also create an incentive for the firm to put their financial interests ahead of your own. Is the firm’s purpose to provide you financial planning and ongoing advice or to sell commission-based products to its clients?

Is R. Kent Harris AND Associates also a Broker-Dealer or are they affiliated with one? What conflicts arise from this relationship? How does R. Kent Harris AND Associates mitigate them?

Currently R. Kent Harris AND Associates is also a Broker-Dealer or is affiliated with one. When firms are dual-registered as broker-dealers, they may be subject to compensation-related conflicts of interest, including revenue sharing from mutual funds, cross-selling of commissioned insurance products, and the sale of proprietary investment products. All of these conflicts can negatively impact clients via hidden fees and overall higher costs.

Does R. Kent Harris AND Associates offer mutual funds that have 12b-1 fees?

12b-1 fees increase the total annual cost of owning a mutual fund with no guarantee of higher returns. Some firms receive these fees as payments, which creates an incentive to promote them.

How does R. Kent Harris AND Associates approach insurance sales? What conflicts do I need to be made aware of?

Currently R. Kent Harris AND Associates actively practices as insurance brokers or agents, or they are affiliated with an insurance company or agency. This arrangement creates a conflict where the firm and its representatives may be motivated to insure clients with products, including annuities and life insurance, that generate high sales commissions when lower-cost alternatives may exist.

Does R. Kent Harris AND Associates offer products that have performance-based fees, or does it accept performance-based fees? Will any of my assets be invested in those products?

When performance-based fees are charged, the financial advisor is paid for outperforming a benchmark, typically an index. While this may seem like an attractive compensation structure to ensure your advisor is making your money work for you, often, the managers of those products are incentivized to take inappropriate risks to beat their performance benchmark. For instance, research has shown that mutual funds that use incentive fees take on more risk that funds that do not, and tend to double down and increase their risk following a poor performance. This could be detrimental to a client during down markets.

Does R. Kent Harris AND Associates perform side-by-side management? How does R. Kent Harris AND Associates mitigate conflicts that arise from managing accounts with differing fee structures?

This typically occurs when firms manage mutual funds or hedge funds alongside smaller retail accounts. Side-by-side management can create an incentive for the advisor to favor the larger funds, potentially leading to unequal trading costs and unfavorable trade executions for their retail clients.

Does R. Kent Harris AND Associates recommend securities that it or its affiliates underwrite, or in which it serves as general or managing partner? Will any of my assets be invested in those products?

R. Kent Harris AND Associates recommends securities that they may have recently taken public or otherwise have controlling interest over. This relationship could introduce bias where a firm and its advisors may push those products over others that may have a more favorable performance with which they are not affiliated.

Does R. Kent Harris AND Associates accept soft-dollar benefits? How do these benefits affect the firm’s selection of a broker-dealer partner?

R. Kent Harris AND Associates receives soft-dollar benefits that could incentivize them to push trades through broker-dealers that provide advantages to the firm instead of through broker-dealers that could provide the best trade execution for their clients.

Which securities does R. Kent Harris AND Associates trade for itself that it will also be recommending to me?

R. Kent Harris AND Associates has marked in their disclosures that they trade recommended securities. While this often can be seen as "eating your own cooking," there are several inherent conflicts that can arise. For example, front running is when a financial professional buys or sell securities ahead of their client. In short, any financial professional should disclose all positions they hold (or have sold short) that they will also be recommending to you.

Our system found no other conflict questions to ask. Checks take place monthly.