Why Work With a Fee-Only Financial Advisor

There's an easy but undeniable reality in the financial consulting and wealth planning industry that Wall Street has kept as a "filthy little secret" for years. That filthy small, and nearly always neglected key is THE WAY YOUR FINANCIAL ADVISOR IS PAID DIRECTLY AFFECTS THEIR FINANCIAL ADVICE TO YOU! west palm beach financial advisor

You would like, and deserve (and subsequently SHOULD EXPECT) fair financial advice in your best interests. But the truth is 99% of the general trading public doesn't have thought how their economic advisor is compensated for the advice they provide. This can be a destructive error, however an all also common one. You will find three simple settlement models for financial advisors - commissions centered, fee-based, and fee-only.Commission Centered Financial Advisor - These advisors promote "loaded" or commission paying products and services like insurance, annuities, and packed shared funds. The commission your financial advisor is making on your own transaction might or may not be disclosed to you. I claim "transaction" since that's what commission based economic advisors do - they facilitate TRANSACTIONS. When the deal has ended, you may well be happy to hear from their store again because they've already received the bulk of whatever commission they were going to earn.

Because these advisors are compensated commissions that might or might not be disclosed, and the quantities may vary based on the insurance and expense items they sell, there's an natural struggle of fascination with the economic assistance provided to you and the commission these economic advisors earn. If their income is dependent on transactions and selling insurance and investment products and services, THEY HAVE A FINANCIAL INCENTIVE TO SELL YOU WHATEVER PAYS THEM THE HIGHEST COMMISSION! That's not to say there aren't some honest and honest commission based advisors, but clearly that recognizes a conflict of interest.

Fee Based Economic Advisor - Here's the true "filthy small secret" Wall Street doesn't want you to know about. Wall Road (meaning the firms and businesses involved with buying, selling, or controlling resources, insurance and investments) has adequately blurred the lines between the three ways your financial advisor might be compensated that 99% of the trading public believes that hiring a Fee-Based Financial Advisor is immediately correlated with "sincere, ethical and unbiased" financial advice.The truth is FEE-BASED MEANS NOTHING! Consider it (you'll understand more when you learn the third form of compensation), all fee-BASED means is that your economic advisor may take charges AND commissions from selling insurance and expense products and services! Therefore a "base" of their payment may be tied to a share of the resources they manage on your behalf, then the "icing on the cake" could be the commission income they are able to probably make by selling you commission driven investment and insurance products.