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The Difference Between Fee-based and Fee Only Financial Advisors |
Article Submitted by: Mel C
Friday, 19 March 2010
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Financial advisors must be paid for their services and you can choose whether you employ one that must be paid or one that gets a commission from the product they advise you to buy. With the latter there will be a conflict of interest, so their advice could be compromised. Financial advisors are people who can offer financial services and advice to government, business and individuals. They help their clients maintain a balanced investment portfolio with an acceptable risk level to suit the individual or company. Such an investment portfolio will usually contain assets such as stocks, bonds, shares, mutual funds and real estate investments to name just a few. Financial advisors are paid in one of two ways, or a combination of both. That is, by fee or by commission for the financial products they sell. Fee only financial advisors are the most popular because when an advisor is paid a set fee by the person they advise, there is no conflict of interest. If they are also paid with a commission on various products, they will naturally try to push those off onto the unsuspecting client whether it is in his best interests or not. However if you are looking for a financial advisor that is paid by a fee, do not get confused by the term fee-based financial advisor because this means that he also accepts commissions. You need to look for the term fee-only which means just what it says. Other financial advisors may seem to you to offer a great deal because they do not charge you at all, but are paid only by a commission on the financial products they sell. While it is good to have no fee to pay, you are still getting the product that they get most commission from. It is not necessarily a product that will make the most money for you, though. Article Source: http://www.ArticleBlast.com |
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