There is a straightforward but undeniable truth in the economic consulting and wealth preparing industry that Wall Block has kept as a "dirty small secret" for years. That filthy small, and often overlooked secret is THE WAY YOUR FINANCIAL ADVISOR IS PAID DIRECTLY AFFECTS THEIR FINANCIAL ADVICE TO YOU!
You need, and deserve (and therefore SHOULD EXPECT) fair financial advice in your best interests. But truth be told 99% of the typical trading community doesn't have idea how their economic advisor is compensated for the guidance they provide. This can be a tragic oversight, however an all also popular one. There are three standard payment types for financial advisors - commissions centered, fee-based, and fee-only.
Commission Based Economic Advisor - These advisors offer "loaded" or commission paying services and products like insurance, annuities, and loaded shared funds. The commission your financial advisor is making in your exchange might or may possibly not be disclosed to you. I state "transaction" since that's what commission based economic advisors do - they help TRANSACTIONS. When the exchange is finished, you may well be lucky to hear from them again since they've currently gained the majority of whatever commission they certainly were planning to earn.
Because these advisors are paid commissions which might or might not be disclosed, and the amounts can vary greatly based on the insurance and investment services and products they provide, there is an inherent struggle of interest in the financial advice provided to you and the commission these economic advisors earn. If their money is determined by transactions and offering insurance and expense services and products, THEY HAVE A FINANCIAL INCENTIVE TO SELL YOU WHATEVER PAYS THEM THE HIGHEST COMMISSION! That's not saying there aren't some honest and ethical commission centered advisors, but clearly this recognizes a conflict of interest.
Cost Based Economic Advisor - Here's the true "dirty little secret" Wall Road doesn't need you to know about. Wall Road (meaning the firms and businesses involved in getting, offering, or handling assets, insurance and investments) has adequately blurred the lines involving the three ways your financial advisor might be compensated that 99% of the trading public feels that hiring a Fee-Based Financial Advisor is straight correlated with "straightforward, honest and unbiased" financial advice. long island financial advisor
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