![]() ![]() Some financial advisors make money by earning sales commissions from third parties. Because their income is from clients, it’s in their best interest to make sure you end up with financial plans and financial products that work best for you. Generally speaking, they have chosen to work under a fee-only model to reduce any potential conflicts of interest. These fees may be charged as a percentage of the assets they manage for you, as an hourly rate, or as a flat rate.Īlmost all fee-only advisors are fiduciaries. Here’s how to think about these four types of financial advisors: Fee-Only Financial Advisorsįee-only financial advisors earn money from the fees you pay for their services. This helps you determine if their recommendations are actually better for you-or for their wallets. Regardless of which kind of advisor you choose, you should make sure you know how they earn money. (The SEC is trying to regulate this, though, by limiting the use of “advisor” to those who hold themselves to a fiduciary standard.) Other people who call themselves advisors are only held to a suitability standard, meaning they only must suggest products that are suitable for you-even if they’re more expensive and earn them a higher commission. Some, but not all, financial advisors are bound by fiduciary duty, meaning that they are legally required to work in your financial best interest. ![]() Part of learning about the different types of advisors is understanding fiduciary duty. That’s why you have to carefully evaluate potential financial advisors and make sure they are good for you and your money. While many people call themselves financial advisors, not all have your best interest at heart. ![]() There’s no federal law that regulates who can call themselves a financial advisor or provide financial advice. Learn About the Different Types of Financial Advisors Not all types of financial advisors offer the same menu of services, so decide which services you need and let this guide your search. They could be looking to establish college funds or trusts for their children, navigate aggressive debt payment situations or solve tricky tax problems. People with complex financial needs, however, may need extra assistance. People whose financial lives are relatively straightforward, like young people without families of their own or significant debt, might only need help with retirement planning. This can cover investment advice for retirement plans, debt repayment, insurance product suggestions to protect yourself and your family and estate planning.ĭepending on where you are in life, you may not need comprehensive financial planning. The best financial planner is the one who can help you chart a course for all your financial needs. Keep in mind that financial advisors provide more than just investment advice. When you first sit down with an advisor, you’ll want to be ready to explain your particular money management needs. Decide How Much You Can Pay Your Financial Advisorīefore you speak to a financial advisor, decide which aspects of your financial life you need help with. Choose What Kind of Financial Advice You NeedĤ. Learn About the Different Types of Financial Advisorsģ. Decide What Part of Your Financial Life You Need An Advisor ForĢ. ![]()
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