Commission, Fee Based or the Combo?

Share Post: facebook Created with Sketch. twitter Created with Sketch. linkedin Created with Sketch. mail Created with Sketch. print Created with Sketch.

Published by Jason Comes | @Jason_Comes

Which is the best way to compensate someone who helps you with your investments/finances? Would paying per transaction be best or via a percentage of the assets? Do you think the advisor could be objective if he or she would earn a commission investing your assets in a product?

These are all great questions and important ones’ consumers need to ask an investment firm before doing business. In an environment like we’ve been in the past 18 months, investment management fees and commissions can eat up your annual returns or your net investment. I believe the best way to compensate an investment firm is hiring a fee based financial planner who doesn’t earn commissions-one whose own income is based on the value of your account (this means if your account is lower, their income is lower and vice versa).

Another important thing to watch is what type of investments your financial advisor will be investing your money in; stocks, bonds, mutual funds, Exchange Traded Funds (ETFs) or annuities. If stocks and bonds, then you may have fees per transaction. If the choice is mutual funds and/ or ETFs, you’ll have recurring annual fees. It is important to know how the advisor will be allocating your investments to keep track of these fees.

All in all, do your due diligence before hiring an investment firm by interviewing three firms about how they are compensated AND what services you will receive. Ask them if they will be giving just investment advice, or do they specialize in other areas such as estate planning, tax planning or even risk management, such as life insurance. How much experience does the advisor and key people have in all of these areas, what designations do they hold… CFP®, CPA, ChFC, CFA etc.? Ask the tough questions as you will be glad you did before making one of the most important decisions of your life.

Share:
facebook Created with Sketch. twitter Created with Sketch. linkedin Created with Sketch. mail Created with Sketch. print Created with Sketch.
Share Post: facebook Created with Sketch. twitter Created with Sketch. linkedin Created with Sketch. mail Created with Sketch. print Created with Sketch.

RECENT POSTS

An Introduction to Bond Ladders

Bonds play an important role in a diverse investment portfolio. As fixed-income securities, they can provide a stable return until they mature. As with any investment, bonds are subject to a certain amount of risk. Interest rate risk, for one, is the possibility that interest rates will ris …

The Sequence of Returns Risk in Retirement

Markets go up and down in ways that are not entirely predictable. For long-term investors, what the market is doing in the present isn’t that troubling; they’ve got a long time to ride out potential downturns. But for recent retirees, an ill-timed market downturn can have a negative impact …

Paying for Health Care in Retirement

By Ryan Yamada, Senior Wealth Planner    When putting away for retirement, we often dream about all the things we’ll be able to do with that money – traveling, going out to eat, maybe trying new hobbies. 

Senate Addresses Taxes, Deficit, Inflation, Health Care in Proposed Bill

By Jamie Hopkins, Managing Director, Wealth Services  Sonu Varghese, Director, Investment Platforms; and Ryan Detrick, Chief Market Strategist, contributed to this report.    Senate Democrats have reached a general agreement on a bill to address climate change, taxes, health care, inflation …
1 2 3 99 100 101

Get in Touch

In just 15 minutes we can get to know your situation, then connect you with an advisor committed to helping you pursue true wealth.

Schedule a Consultation