I'm talking about a guy who will not earn commissions but will charge a percentage of my total portfolio to manage it.
2007-03-09 04:43:41 · 4 answers · asked by freddybmann 1 in Business & Finance ➔ Personal Finance
Certified Financial Planners have to meet certain educational and work experience requirements. The more experience he has and the more complex your problems, the more he can charge.
Generally, financial planners charge $125 to $350 per hour, depending on their expertise and experience. Or they can charge a commission, from .5 to 1.25 percent of the assets under management.
They can also charge on a per-project basis or set a flat fee for comprehensive financial plans. These can cost $2,000 to $5,000.
I believe that you are correct in dealing with a fee based planner. They are much less likely to have a conflict of interest that one who works on commission.
2007-03-09 05:36:51 · answer #1 · answered by Anonymous · 2⤊ 0⤋
Fiduciary is the key word. Anyone earning a commission is not fiduciary to you that is why a commission always makes a person suspect.
A percentage of your portfolio is not worth it either. Why should you pay for results not delivered?
Ask yourself this "is this planner extremely successful with His/Her personal investments? or Is all of their wealth accumulated through fees and commissions from other peoples money?" If this person isn't make good investment decisions for themselves how can you expect them to make good ones for you?
A percentage of earnings is the only semi-tolerable solution. If your portfolio makes money then the planner makes money, if you lose money then they get nothing (well maybe some harsh language if they were an idiot). Annually is preferred so they won't, for example, take short term risks to earn a quick buck in the first quarter then 4 months later you lose a bunch.
for the answers below even 'certified financial planners' may not be fiduciary to you. be very careful there are a lot of "back door" commissions available.
2007-03-09 13:34:20 · answer #2 · answered by hogie0101 4 · 1⤊ 1⤋
Listen to Sal. Rob is a sales hack & not to be trusted. I agree that a fee-based planner is much less likely to give you bad advice just so s/he can make a few bucks. That's why Rob sells crappy whole-life life insurance.
2007-03-09 15:26:42 · answer #3 · answered by Tom's Mom 4 · 0⤊ 1⤋
Unless your situation is extremely complex, any fee is probably not reasonable. Why do commissions make an advisor suspect?
You've probably either had an experience with one of the rare bad apples, or you've just fallen for the hype the NAFP spreads to further their agenda.
2007-03-09 12:55:38 · answer #4 · answered by Rob D 5 · 0⤊ 5⤋