Once I read Ed Mahaffy’s book titled “How To Select A Financial Advisor: The Least You Should Know”, interviewed him, reviewed his video library, I knew we had the right person for this special financial planning series. On Fridays, TaxConnections presents questions often asked of a Financial Planner.
Ask Ed: Financial Planning Questions
Question: How are you compensated-by commissions, fees or both?
Answer: Many advisors charge a percentage of the value of the assets they manage-typically 1.0% to 2.0%. Most advisors are licensed to sell products and earn commissions as well.
It’s critical to identify all sources of advisor compensation and determine which compensation model makes the most sense for you. Be advised that many financial products have commissions that can be difficult to identify. Require the advisor to disclose, in writing, any revenue sharing or commission arrangement they may have.
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