I buy corporate bonds for my fixed income allocation. I use a broker from a large brokerage firm to find bonds which he will then purchase for me.
From the most recent confirms, it looks like I'm being charged a 1.8% markup for each purchase. For example, I recently purchased 40,000 fixed to float bonds at $102.05 which had a markup of 1.8% which is $720.
I'm not charged AUM fees. I'm only charged a markup on purchases. I don't have many sales as the bonds mature and return the principal.
My understanding is that brokerages buy large quantities of bonds and then allocate them to brokers for sale to their clients.
Is a 1.8% markup a reasonable and competitive fee?
I'm not sure where to look to see if 1.8% is an industry standard. If I can find an equally competent brokerage firm that charges 1.0%, it would be worth switching to that firm.
NOTE:
I do not want to invest in bond funds. I also do not want to do my own bond research. I want to rely on seasoned experts to pick my bonds.
Thanks for your help.
From the most recent confirms, it looks like I'm being charged a 1.8% markup for each purchase. For example, I recently purchased 40,000 fixed to float bonds at $102.05 which had a markup of 1.8% which is $720.
I'm not charged AUM fees. I'm only charged a markup on purchases. I don't have many sales as the bonds mature and return the principal.
My understanding is that brokerages buy large quantities of bonds and then allocate them to brokers for sale to their clients.
Is a 1.8% markup a reasonable and competitive fee?
I'm not sure where to look to see if 1.8% is an industry standard. If I can find an equally competent brokerage firm that charges 1.0%, it would be worth switching to that firm.
NOTE:
I do not want to invest in bond funds. I also do not want to do my own bond research. I want to rely on seasoned experts to pick my bonds.
Thanks for your help.
Statistics: Posted by Mazel — Sat Aug 03, 2024 5:12 pm — Replies 14 — Views 954