Pros of Hiring a Fee-only Financial Advisor
Those who are looking for the best advisors should consider one who is compensated in a way other than commission. These planners look at your entire fiscal situation and give you an honest, objective opinion on what you need to do. While they may suggest purchases of certain products, these will be ones that they believe will assist you in your goals. There is no loyalty to a specific company or product because there is no bonus or commission to earn.
You pay a fee-only financial advisor based on how often you meet with them. You could pay an hourly expense or you could pay a retainer in order to have him or her on call. You may even negotiate payment of a percentage of the investment assets your planner is managing. Each professional has his or her own pay structure.
In addition to having flexible payment options, you can choose between services. Some work with you to provide a complete financial review for a fixed project. You can also find someone to review your investment portfolio or develop a financial plan.
Things to Consider Before Hiring a Fee-only Financial Advisor
For most clients, this type of planner is the optimum choice. However, not everyone works well with a charge-based counselor. You may work better with someone who is either commission only or commission and fee compensated.
There is no guarantee that you will not have conflict. You should check references to ensure that your new asset manager is competent. Working for only a set rate does not equal competence. Those who are experienced working with people nearing retirement would not be the best choice for someone in the private sector.
You also need to check with the counselor about their requirements. Some will work with those who have a minimum level of assets. If you have a small portfolio, then you may not qualify. It is one of the many questions you should ask before hiring a consultant.