One problem associated with commission-based transactions is that the arrangement provides

Question

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Commission-based transactions create a conflict of interest for the financial advisor or broker. They may be tempted to recommend frequent trades or changes in the investor's holdings, even if those changes are not in the investor's best interest, simply to generate more commissions for themselves. This can result in higher costs for the investor without necessarily improving their returns.

One Problem Associated with Commission-Based Transactions Is That the Arrangement