Articles on line discuss how planners get paid, whether you should trust them or not and what they do.
However, the best point made may be the distinction between “answer person” and “counselor” (or “financial guide”).
You can access so much on line today that some people believe that a financial advisor is only needed when the answer cannot be found. This misses much of what a good financial planner can do for clients.
A good planner applies experience and knowledge to each client’s goals and resources to help guide them in the decisions that they face. This is real value added, but also requires a compensation scheme that allows the planner to ignore commission and other incentives so that the best advice can be given.
Furthermore, this type of guidance can involve encouraging changes in behavior, expectations and overall knowledge of finances. This takes time and cooperation between the financial planner and client. So, again, the incentives have to be correctly set.
This is why our firm charges for time, and dedicates the planning work to the individual goals of each client. There is no confusion from commissions or fees based on assets under management.
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