September 10, 2013
How is a fee-based financial advisor compensated? What about a fee-only financial planner? Why should you care?
How is a fee-based financial advisor compensated? What about a fee-only financial planner? Why should you care?
Come on folks, I know you can answer this question. The fee-based financial advisor earns his money in multiple ways to include commission on the products he is pushing. The fee-only planner earns no commissions and is paid strictly by money under management, hourly, project or some kind of combination of those three.
What is a person to do? Steer clear of fee-based financial advisors. Their conflict of interest is something you cannot afford. Use a fee-only planner when you have a bunch of money and could use a financial plan and someone to hold your hand when times get tough (the market tanks). Everyone else? Become your own financial advisor. You can start down that path by reading The Little Book of Common Sense Investing by John Bogle. He will steer you well. I trust him and so should you. He is looking out for you.