How to Pay Your Financial Advisor

http://online.wsj.com/article/SB10001424052970204554204577024152103830414.html

Discusses the pros and cons of various compensation schemes for
advisors

Asset-Based Fee
Fee Plus Commissions
Flat Fee
Net Worth and Income
Hourly Fee

What’s missing, I think, is the cases where people don’t realize
that they’re paying at all, which usually means commissions or
back-end fees.  Lots of folks who call themselves “financial
advisors” are actually selling products and their commissions
are hidden in the prices of the products (this is especially
common with insurance products, but it’s also buried in various
non-insurance products like B or C share-class mutual funds).

Anyway, it’s a welcome article and I’m glad they’ve put it
out there.  The examples of conflicts of interest are good
and anyone getting financial advice (whether they are paying
for it, or just think that they are not) should read it.

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