Fee-only monetary advisors are people paid directly by their clients after providing them with their services. Additionally, they are not eligible to acquire extra money from commissions from recommending any products at all. They are considered the best since they give assistance to their customers in their best interest and give the best advice.
However, people usually confuse a fee-only advisor with a fee-based advisor. It may seem as if though there is no difference, but the two vary in how they get their payments. A fee-based advisor usually earns commissions or charges fees. Here are the differences between the two;
What does a fee-only advisor do?
As pointed before, a fee-only financial advisor does not accept commissions. They also cannot include any third-party payments or receive sales compensation. They must provide financial guidance to their client or guide them on their investments for a certain fee. They charge their services either hourly, at a percentage rate of income or assets, payment according to complexity, monthly payment, or even quarterly.
What does a fee-based advisor do?
If you hire a fee-based financial advisor, it means that the individual can accept commissions or get third-party payments. They earn commissions from selling products. Additionally, they are not trusty with their customers and may benefit from arrangements that benefit them indirectly. But that doesn’t mean they are fraudulent and shouldn’t be trusted. Also, it’s their choice on what kind of relationship they want to have with their clients.
When considering which financial advisor you need, it would be best to consider a fee-only financial advisor. This is because they usually are trustworthy and have good advice regarding your requirements. This way you will be able to get advice on how to know what is the best thing to do with your money.
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