The trouble with commissions

I began my finance career working for a major brokerage firm as a Financial Advisor trainee. The first phase of my job was to obtain the licenses to sell investments and insurance. Upon receiving my licenses, my next task was to obtain clients and create investment portfolios with the numerous products available through the firm. Along with my peers, I was given a sales quota, a desk, and a phone. The firm appeared indifferent about which investments were selected, it's concern was only that I produce. The company had a variety of investment products that paid varying degrees of compensation to me. So far so good...

As I commenced the process of gathering clients, I began to experience internal conflict. Early on, I had decided to use a fee-only platform in which clients were charged a flat fee rather than a commission. I was having some success with this platform, but found myself discounting fees to a level that I believed was appropriate. I noticed that some of my peers were selling Annuities which carried higher commission rates than other Investments. Still others were selling a more expensive share class of mutual funds than was required. It dawned on me that this was an inherent flaw built into the Advisor pay structure. In the area of self-interest the incentive to use higher commissionable products was creating a conflict of interest between the broker and the client. The question arises, " Is the investment I'm selling to the client in his best interest, or is it in my best interest. After several weeks of agonizing over this issue, I decided to exit the firm and seek a model that was in-line with my value system.