I am thinking of using an advisor to manage part of my portfolio. Most are fee-based charging a percentage per year based on amount of assets managed. However, I've had past bad experiences with this type of manager. My discount broker suggested a manager that is willing to offer fees charged based on performance. That is, the fee would be based on gains to the account and split: 35% to manager and 65% to me. Performance would be based on a comparison with the SPX value.

If it is a bad year and everything is down, the fee would still be based on a comparison of the SPX index and how my portfolio performed. If the manager beats the SPX index performance, then I would still be liable for the fee split. If the manager matches the SPX index, then I would not be subject to any fee.

What are your thoughts about this method of fees being accessed?