There is an easy but undeniable reality in the economic visiting and wealth preparing market that Wall Street has kept as a "filthy small secret" for years. That dirty little, and nearly always overlooked secret is THE WAY YOUR FINANCIAL ADVISOR IS PAID DIRECTLY AFFECTS THEIR FINANCIAL ADVICE TO YOU!

You would like, and deserve (and consequently SHOULD EXPECT) fair economic advice in your best interests. But the fact is 99% of the general investing public does not have any idea how their financial advisor is compensated for the assistance they provide. This can be a destructive error, yet an all too popular one. There are three simple settlement types for economic advisors - commissions based, fee-based, and fee-only.Commission Centered Economic Advisor - These advisors promote "loaded" or commission paying items like insurance, annuities, and filled common funds. The commission your financial advisor is getting in your purchase may or may not be disclosed to you. I say "transaction" because that's what commission centered financial advisors do - they help TRANSACTIONS. Once the transaction is finished, perhaps you are lucky to hear from their website again because they've currently earned the bulk of whatever commission they were going to earn.

Since these advisors are compensated commissions which can or may not be disclosed, and the quantities can vary greatly on the basis of the insurance and investment products and services they promote, there is an inherent struggle of interest in the economic guidance provided to you and the commission these financial advisors earn. If their income is dependent on transactions and selling insurance and investment services and products, THEY HAVE A FINANCIAL INCENTIVE TO SELL YOU WHATEVER PAYS THEM THE HIGHEST COMMISSION! That's not to say there aren't some honest and ethical commission centered advisors, but clearly that recognizes a struggle of interest.

Charge Based Financial Advisor - Here's the actual "filthy little secret" Wall Block doesn't need you to understand about. Wall Road (meaning the firms and companies involved in buying, selling, or controlling assets, insurance and investments) has enough blurred the lines between the three methods your financial advisor may be compensated that 99% of the trading public thinks that selecting a Fee-Based Economic Advisor is right correlated with "straightforward, moral and unbiased" economic advice.The truth is FEE-BASED MEANS NOTHING! Think about it (you'll understand more when you understand the 3rd form of compensation), all fee-BASED indicates is that the financial advisor will take expenses AND commissions from selling insurance and investment items! So a "base" of the settlement might be tied to a percentage of the assets they handle in your behalf, then a "topping on the cake" could be the commission revenue they are able to potentially make by selling you commission driven expense and insurance long island financial advisor.