Get Your Financial Life Together - Erin Lowry, Author of the Broke Millennial series
More Money Podcast
How Financial Advisors Get Paid
When seeking financial advice, it's crucial to understand how the advisor gets paid. The term 'financial advisor' is largely unregulated in the US, allowing various professionals, such as insurance brokers, to use it. Asking how they get paid is important, as some may earn commissions from selling specific products. If a flat fee is charged, it's essential to inquire about any additional commissions on advised products. Advisors who charge a flat rate based on assets under management should be questioned about the value provided for that fee. The biggest red flag is when advisors are solely commission-based, as it raises concerns about the quality of their advice and potential conflicts of interest. When working with a wealth management firm or bank, it's recommended to ask about their payment structure, credentials, and certifications.
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