Subscribe
Home Craft Be Wary of ‘Fee-Based’ Vs. ‘Fee-Only’ Financial Planners

Be Wary of ‘Fee-Based’ Vs. ‘Fee-Only’ Financial Planners

by Staff
0 comment

Photo: fizkes (Shutterstock)

Whether you just inherited an unexpected sum of money, you’re looking to buy a home, or you’re figuring out how to set aside money for retirement—there are plenty of reasons to hire a financial planner. And when it comes to finding the right financial planner for you, the last thing you want is to get ripped off. The difference between you finding someone you trust and getting misled could come down to one key term: Fee-based versus fee-only financial planners.

Here’s what to know about the difference betweenfee-based and fee-only financial planners—and how to make sure you trust the right advisor.

Who can call themselves a financial planner?

First off, as we’ve previously covered, not every financial advisor can call themselves a Certified Financial Planner® (CFP). A qualified CFP is a professional who’s certified by the Certified Financial Planner Board of Standards, Inc. CFPs have a fiduciary duty, meaning they’re legally required to act in your best interest—and this is where the difference between “fee-only” and “fee-based” comes in.

What’s the difference between “fee-only” and “fee-based” advisors?

Fee-only planners act as a fiduciary and are compensated only by their client (you). They cannot accept third party commissions.

Fee-based advisors, however, are paid not only by you but via other sources, such as commissions from investment products. They’re incentivized by investments that pay them more, and therefore have conflicts of interest. If you see someone advertising their services as “fee-based,” they’re hoping you confuse them with fee-only planners.

How to choose the right financial planner for you

If you’re stressed about the world of difference that rests on the one-word difference between fee-only and fee-based, don’t worry. Here are some additional methods to vet a financial planner before trusting them with your money. These tips come from certified financial planner and personal finance columnist Liz Weston in Oregon Live:

  • Interview multiple candidates. You aren’t tied to the first planner you find. Before committing to someone’s services, ask them about how they’re paid and what you can expect from both their upfront costs and the cost of the investments they recommend to you.
  • Know the right questions to ask. Like we covered above, you want to make sure your financial planner has a fiduciary duty to act in your best interests. Ask about their qualifications and experience, including whether they typically advise clients similar to yourself.
  • Do your own background check. Check a certified financial planner’s status at cfp.net/verify-a-cfp-professional and check their backgrounds at BrokerCheck.finra.org.

If there’s one takeaway here, it’s to disregard fee-based advisors and go with the fee-only financial planners who are required to put your interests first.

   

Read the full article here

SaleBestseller No. 1
Apple AirPods Max Wireless Over-Ear Headphones. Active Noise Cancelling, Transparency Mode, Spatial Audio, Digital Crown for Volume Control. Bluetooth Headphones for iPhone - Green
Apple AirPods Max Wireless Over-Ear Headphones. Active Noise Cancelling, Transparency Mode, Spatial Audio, Digital Crown for Volume Control. Bluetooth Headphones for iPhone - Green
 Apple-designed dynamic driver provides high-fidelity audio; Active Noise Cancellation blocks outside noise, so you can immerse yourself in music
$479.00
SaleBestseller No. 3
Apple iPad Air 2, 64 GB, Space Gray (Renewed)
Apple iPad Air 2, 64 GB, Space Gray (Renewed)
Apple iOS 8; 9.7-Inch Retina Display; 2048x1536 Resolution; A8X Chip with 64-bit Architecture; M8 Motion Coprocessor
$141.99
Bestseller No. 4
2021 Apple 10.2-inch iPad (Wi-Fi, 64GB) - Silver
2021 Apple 10.2-inch iPad (Wi-Fi, 64GB) - Silver
Gorgeous 10.2-inch Retina display with True Tone; A13 Bionic chip with Neural Engine; 8MP Wide back camera, 12MP Ultra Wide front camera with Center Stage
$331.99
Bestseller No. 5
2022 Apple TV 4K Wi‑Fi with 64GB Storage (3rd Generation)
2022 Apple TV 4K Wi‑Fi with 64GB Storage (3rd Generation)
4K Dolby Vision and HDR10+ for vivid picture quality; Dolby Atmos for three-dimensional, theater-like sound
$123.49
Bestseller No. 7
Apple AirTag 4 Pack
Apple AirTag 4 Pack
Keep track of and find your items alongside friends and devices in the Find My app; Simple one-tap setup instantly connects AirTag with your iPhone or iPad
$94.98
Bestseller No. 8
Apple MacBook Air with Intel Core i5, 1.6GHz, (13-inch, 4GB,128GB SSD) - Silver (Renewed)
Apple MacBook Air with Intel Core i5, 1.6GHz, (13-inch, 4GB,128GB SSD) - Silver (Renewed)
1.6 GHz dual-core Intel Core i5 (Turbo Boost up to 2.7 GHz) with 3 MB shared L3 cache; 13.3-Inch (diagonal) LED-backlit Glossy Widescreen Display, 1440 x 900 resolution
$299.99
Bestseller No. 9
Apple Of My Eye
Apple Of My Eye
Amazon Prime Video (Video on Demand); Amy Smart, Burt Reynolds, Liam McIntyre (Actors); Castille Landon (Director) - Castille Landon (Writer) - Dori A. Rath (Producer)
$3.99
SaleBestseller No. 10
Apple 35W Dual USB-C Port Compact Power Adapter ​​​​​​​
Apple 35W Dual USB-C Port Compact Power Adapter ​​​​​​​
The compact size and folding prongs make it easy to pack and store.; Charging cable sold separately.
$52.00

You may also like

Leave a Comment

Iman Hearts is one of the biggest lifestyle news and articles portals, we provide the latest news and articles about family, lifestyle, entertainment, and many more, follow us to get the latest news about what matters to you.

 

© 2022 Iman Hearts. All rights reserved. Sitemap