Financial professionals are paid in a variety of ways. When you are looking for a financial professional, you definitely want to know how they will be paid.
Many financial planners are paid a flat fee for their service. This flat fee may be determined by the size of the financial plan, by the hour, or by a percent of the assets you give them to manage.
Financial professionals who are paid by commission receive income based upon what you choose to buy. Some financial planners may charge a fee AND receive commissions. Terms such as “fee based,” “fee plus commission,” and “fee offset” describe this payment method. With a fee offset method, some of your fees may be reduced if the financial professional receives commissions when making purchases for you.
Key Concept:
You should know how a financial professional is paid and whether this might cause a conflict of interest.
The advantage of fee only planners is that there is less potential for a conflict of interest than with a commission paid planner.
No comments:
Post a Comment