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How much are you paying your financial planner?

Young woman uncertain about how to invest her money and needs help to choose between Advice Only financial planners, Fee Based financial advisors and Commission Only wealth managers.It is important to understand how much you pay in financial planning fees, or the commissions your financial advisor earns when you purchase financial products.

Some advisors charge a mix of fees and commissions.   Another key variable: when your fees are due.   It could be upfront or with every transaction. 

Other financial advisors charge "Deferred Sales Charges" if you decide to get out of a fund within a certain time frame.  And don't forget about "Trailer Fees" (ask your advisor to break these down for you).

Confused?  Let's clarify:

Fee-Based:  The calculation of your fee is based on the assets you are investing.  Most fee-based financial planners charge 1% annually for the management of your assets, plus they may receive a commission on products sold.   The investment products offered are typically limited to a single offering and, in many cases, that offering is a product line sold by the company that employs the financial advisor.

Commission-Only:  Your fee is based on what you buy from your investment advisor.  Commissions varies with the product sold, making it very difficult to understand exactly what you are paying.  The investment products offered are typically limited to a single offering and, in many cases, that offering is a product line sold by the company that employs the financial advisor.

Advice-Only:  A set fee is negotiated upfront, usually based on the assets being invested or on the complexity of the financial plan, but you can also purchase services by the hour.  There are no other charges or fees.   Better still, Advice-Only financial planners are not paid commission and, hence, are free to recommend what they believe is in the client's best interest.

Still not sure what is best for you?  Interested in knowing what you are paying now?  Ready to consider a better alternative?  Call Sandi at Estate by Design to get the information you need to make an informed decision.

For more information, please contact us online or call: 780-467-6647

Edmonton advice only financial and estate planner

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