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What are different financial advisor fee models?

If you’re looking for help with your financial planning you’ll want to know about the various financial advisor fee models. There are two primary types of financial advisor fee models. The first is fee-based. There are many fee-based advisors and they can work with individuals, businesses, and governments to help with investments, insurance, mortgages, and retirement plans. Fee-based advisors collect fees based on the value of the assets you are placing in their hands up to 1.5% as well as various other commissions and fees. They can receive bonuses and finder’s fees as well as referral fees from other companies. Sometimes a fee-based advisor is good because they can be more likely to evaluate every single option available to both you and them for the best thing for both. A fee-only advisor that does not receive commissions does not have as much incentive to do the exhaustive searches through all the possible options. However sometimes a fee-based financial advisor can produce unwanted results. It has been known to happen that a fee-based advisor will use a process known as churning whereby they buy and sell securities more frequently than is needed to receive larger commissions. This can have quite an impact upon your portfolio especially when only done for the advisors gain so you must make sure your advisor won’t do such things before you hire them.


Generally you can find out the advisors with the best reputations and consultation fees online with simple searches through your favorite search engine. These searches can turn up reviews by previous customers who have had favorable or less than favorable interactions with your local brokers. If you live in Albany, New York for instance a search for Albany New York financial advisor on google.com immediately turns up plenty of local advisors and typing in their names with review after generally turns up reviews of each one. These reviews can be the difference between a wonderful portfolio and one that has been thoroughly churned so be sure to do some research before you settle with any particular advisor. The other type of financial advisor is a fee-only advisor. These advisors only charge based on the value of assets you’re entrusting to them. Usually the fee is somewhere between 1 and 1.5%. This is usually enough for them to receive a reasonable sum but not enough to negatively impact your portfolio and if they’re good advisors and your portfolio is going up then you will still certainly be in the green every year.


Beyond helping you with investments advisors can help you with various types of insurances and even mortgages. These services can be vital when trying to buy a house or when planning your retirement. Certain types of insurances may help you in case of illness and others can protect your entire family. If any of these services might be of interest to you than you should do a little research and find out if a financial advisor is right for you.



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