About Financial Planner Fees

Video Transcript

"Well financial planner fees, there's three basic types of financial planners out there. There's a fee only, financial planner. There's a fee based financial planner. And there's a commission financial planner. Let me define those for you. A fee only means exactly what the term says. That person will charge you a fee, they will do a financial plan for you. They will make suggestions and recommendations based on what they see as a good program for you. And they don't get paid when you act on any of those suggestions or ideas. Then there's a fee based financial planner. They'll charge you a fee and they are also paid some sort of a stipend or renumeration when you act if you act through them on one of their suggestions. And then there's commission only financial planners. Financial planners that don't charge a fee, but they do get paid by the companies that you do business with. And so the question comes up well which one sounds best to you. And the answer would be well from one perspective I'll pay my eight hundred or fifteen hundred dollars and I'm going to get my financial plan and then I'm going to go ahead and do what I want to do and that person that gave me that financial plan since they are not being paid anything on what I do they've got no incentive to steer me in a particular direction. And there's a lot to be said for that if that person, if all I had was an insurance license for example. All I have is a hammer everything looks like a nail. Right if that's the only way I get paid. If all they were doing was securities and ninety percent of the people with a securities license in this country don't have an insurance license. Ninety percent of the insurance agents don't have a securities license. That ought to tell you something. Right. What about real estate agents well they get paid a commission right, by whom; the seller. Where does the seller get it, well they get it out of their pocket. When do they get it, well when you buy the house. So they got it from you, the buyer. So when the day is done the real question is am I going to get unbiased advice from this individual. And the answer is that's a big depends. You really have to ask a lot of questions of the person that you are doing business with to find out where their heart is as well as their pocket book. And you can usually tell with people that have commission breath alright. Because they are pretty much Johnny One note, they've got a widget that they are marketing and they think that everybody ought to have their widget. That's not a financial planner that's a salesman. A true financial planner will do a needs analysis, they won't try to recommend usually anything when they first sit down with you. They are just trying to discover where it hurts, right, and they are trying to help you understand your own situation."