Your financial planner’s compensation method could dramatically shape the advice you receive. Shocking, right?
Here’s why: some advisors work under guidelines that only require their advice to be ‘suitable’ for your situation. On the other hand, some, like us at Modern Wealth, act as fiduciaries, ensuring every recommendation genuinely has your best interests at heart.
You might scratch your head, wondering why an advisor would suggest something that isn’t your top choice. The answer lies in the compensation structure. There are three core ways financial planners get paid:
- Commission-Based Model
- Commission & Fee-Based Model
- Fee-Only Model
Commission and commission plus fee-based planners earn through specific financial products they sell. Because of this conflict of interest, these advisors might find it challenging to prioritize your needs above theirs.
Here at Modern Wealth, we’re firm believers that the Fee-Only compensation model is the most transparent and unbiased way to go. This approach minimizes conflicts and pledges our commitment as your trusted fiduciary. With Fee-Only advisors, you pay directly for advice, plan implementation, and the continuous management of assets.
Fee-Only financial planners’ compensation could be hourly, a retainer, a percentage of assets (AUM), or a flat fee, depending on your chosen advisor. Come on in, and let’s chat about how we can serve you best!