The soundness of your financial health depends on the kind of advice you receive. With no time and stressed out at work you lay a trust on your financial planner to ensure your financial objectives are taken care of. There are mainly three varieties of financial planners which you will come across. A fee based, a commission based and a fee only planner. There is a strong distinction of how these planners work.
1. Commission Based - The planners from this category earn from commissions received from the financial products they sell such as insurance, investments, real estate etc. They are likely to be associated with companies and so will take the commission earning as their bigger interest. Very less go in planning for the clients.
2. Fee Based - A fee based planner will have earnings from both - from clients and commissions from the financial products they sell. There are independent planners and representative from companies who are into financial planning. No doubt there are sincere people doing a honest job but there will always be a possibility of a bent towards commissions if the earnings from it are substantial.Hence, a probability of conflict of interest will always be there on the cards.
3. Fee Only Planner - They earn their income solely from their clients and are paid for their advice.Since they do not have motivation to earn commissions they do not carry any financial stakeon the recommendations given. They focus more on long term investing and avoid any short term trade thus ensuring their client's interest is served.
Being a fee only planner we do not accept any kind of compensation from a third party which allows us to create a financial plan that is unique to your situation. This helps us in avoiding a conflict of interest which can arise on financial compensation related to any advice. Moreover, to ensure you continue using our services we offer more than just a traditional financial planning advice. Our focus is on making you understand about your personal finance and so budgeting, money management, regular discussions on your personal finance behavior, unique set of values, priorities, challenges and opportunities which decide the rich life you will live are features of our services.
Thus, a Fee Only Planner becomes the right choice when you are looking for someone who can serve your interest on priority.