Greensboro, NC -- Just when you think financial planners are only for people with multiple investments and a family inheritance, Matt Logan of Matt Logan, Inc has another perspective.
"Many times I meet with people who have held off on contacting a financial planner because they did not think that they could afford one. Today we want to look at the different ways your financial planner or financial advisor is paid and point you in the right direction for finding someone who would be a good fit for you."
First of all, most anyone can afford a financial planner or financial advisor because there are advisors who work with all types of people. While some companies do have account minimums that are required, others have none. Some people specialize in retirement planning or college planning while others do full financial plans to cover a number of goals and not just one.
There are lots of resources out there to help you find more information about financial advisers and financial planners and to make sure that you find one who is the right fit for you. One great resource is the Certified Financial Planner Board website www.cfp.org. There is a lot of information on different Certified Financial Planners(tm) and you can search different criteria such as account size, location and practice specialty.
Referrals are another great resource. Ask your family or friends who they are using and ask them why they like their advisor. .
So how do financial planners get paid?
"I will tell you first that you should ask that question when you're first interviewing to find someone to work with as this is an important part of the equation. There are basically two main models in which your financial planner can earn his or her income. There are commissions and fees."
Commission based advisors are paid a commission every time that they sell you a product. This product could be a stock, bond, mutual fund, annuity, life insurance policy or any other of a number of financial products for you.
Fee based advisors are paid a fee for their services. They could charge this fee by the hour or based on a percentage of the money you have invested with them. Others will charge you a fee for a financial plan and then you are to implement it yourself.
While I do work with some clients on a commission basis, the bulk of my relationships are fee based where I am compensated a small percentage of each person's portfolio to manage their investments. The reason I feel like this is a good fit is because my income is tied to their performance.