A fee-only financial planner near me is often a cheaper alternative to a fee-for-service advisor. This is because fee-only financial planners cannot accept commissions or any other form of compensation, such as referral fees or kickbacks. Also, fee-only advisors provide more accurate advice since they do not receive referral fees or kickbacks from selling other products. Read on to discover the benefits of a fee-only financial planner.
Fee-only financial planners are less expensive
Fee-only financial planner near me typically charge between 0.59% and 1.18% of the total assets under management, but not always. Financial planners can still help you meet your financial goals, but they can offer you more guidance and advice on specific topics.
For instance, fee-only financial planners can identify estate-planning questions and issues and provide advice and feedback on existing approaches. Unlike fee-only financial planners, who generally charge a set fee per asset under management, fee-only planners may be cheaper than the other options.
Some fee-only financial planners charge a fixed percentage of assets under management. They may also charge by the hour or monthly rate. Some planners offer flexible fee schedules to fit with their clients. In addition to fee-only financial planners, some work exclusively with high-net-worth clients, which will typically cost more. Fee-only financial planners are less expensive than their commissioned counterparts, but their fees will reflect that.
The fees charged by a fee-only financial planner
The fees charged by a fee-only financial planner near me are more transparent than those of commissioned advisors. Furthermore, fee-only financial planners can choose from a wider variety of investments than commission-based advisors.
They can create the best possible investment portfolio for their clients. However, some products can only be purchased in commission style, including life insurance, some types of limited partnerships, and other atypical investments. Because of consumer pressure and regulators, the number of commission-based products is dwindling rapidly.
Fee-only financial planners held to a higher standard than commission-based advisors. As their only source of compensation is their fees, they are held to a fiduciary standard. Their recommendations are appropriate for the client’s situation and financial goals.
As a result, these advisors are more objective and transparent. Unlike commission-based advisors, fee-only planners do not accept commissions from products they sell. They are only responsible for recommending investments that are suitable for the client.
Financial planners are more transparent
The most apparent benefit of fee-only financial planner near me is that they are not tempted to sell their client’s life insurance or annuities. They concentrate on what they do best – financial planning. Fee-only planners also realize the potential conflict of interest in selling insurance products. They realize their clients are best served by a professional specializing solely in this area.
This approach also allows fee-only financial planners to focus on evaluating their clients’ existing coverage and recommend an additional policy or additional protection.
There are also significant disadvantages to fee-only advisors selling permanent insurance. Unlike fee-only financial planners, these professionals not required to recommend permanent insurance products to their clients. Instead, they earn commissions on assets, which negates the tax benefits of these products.
They cannot assess the risk involved in insurance products. They also lack the actuarial knowledge needed to make appropriate recommendations. Thus, they cannot offer objective advice on permanent life insurance products.
Fee-only financial planner
Fee-only financial planner near me registered investment advisors who do not accept compensation based on product sales. As a result, they have fewer inherent conflicts of interest and thus, can give better advice to their clients. Fee-only financial planners also are members of the National Association of Personal Financial Advisors, one of the leading professional organizations promoting this practice. They also follow rigorous ethical and legal requirements.
Fee-only planners are less expensive than traditional financial advisory firms. They have a more comprehensive range of expertise and can advise virtually any subject, including retirement and estate planning. Although some fee-only planners avoid issues related to estate planning, they can identify questions and concerns and help their clients work toward their goals.
They can also provide valuable feedback and strategies to improve their approach to achieving their goals. These benefits make fee-only financial advisors an excellent choice for individuals on a tight budget.