Before you hire an investment advisor, it is important for you to understand how they will get paid. This same understanding is true for financial planners and stockbrokers as well. Generally investment planners are paid in any of the following ways:
- An hourly rate for the time they are working on your financial plan.
- A commission on the securities they sell (if an advisor is also a broker-dealer).
- A fixed fee.
- A percentage of the value of the assets they manage on your behalf.
- A combination of any of the above mentioned options.
These methods of payments will all have both benefits and drawbacks, so seeking more than one planner in order to find out their methods of charging fees is always recommended. Another option to consider is asking if any of the fees charged to you are negotiable. You may be able to save money by simply asking for a discount on the service provided. Your best option when choosing an investment advisor will be based on what actual needs you are facing and the amount of time you have to obtain the funds to address those needs.
