If You Were Warren Buffet, You Would Not Need a Financial Advisor

You need, and deserve (and consequently SHOULD EXPECT) fair financial guidance in your best interests. But truth be told 99% of the overall trading public has no thought how their economic advisor is compensated for the guidance they provide. This is a sad error, yet an all too frequent one. You can find three simple compensation types for financial advisors - commissions centered, fee-based, and fee-only.Commission Centered Economic Advisor - These advisors promote "loaded" or commission spending items like insurance, annuities, and loaded mutual funds. The commission your economic advisor is earning in your purchase may possibly or may not be disclosed to you. I claim "transaction" because that's what commission based economic advisors do - they facilitate TRANSACTIONS. Once the deal is over, you may well be happy to know from their store again because they've already earned the majority of whatever commission these were planning to earn. west palm beach financial advisor

Because these advisors are paid commissions which can or may not be disclosed, and the quantities can vary greatly on the basis of the insurance and expense products they sell, there's an inherent struggle of fascination with the economic guidance given to you and the commission these economic advisors earn. If their money is determined by transactions and offering insurance and investment products, THEY HAVE A FINANCIAL INCENTIVE TO SELL YOU WHATEVER PAYS THEM THE HIGHEST COMMISSION! That's not saying there aren't some sincere and honest commission centered advisors, but clearly this determines a conflict of interest.

Cost Based Financial Advisor - Here's the actual "filthy little secret" Wall Road doesn't need you to understand about. Wall Street (meaning the firms and agencies involved in buying, selling, or handling assets, insurance and investments) has enough blurred the lines between the three ways your economic advisor may be compensated that 99% of the trading public thinks that selecting a Fee-Based Financial Advisor is straight correlated with "sincere, honest and unbiased" economic advice.The the fact is FEE-BASED MEANS NOTHING! Think about it (you'll understand more once you learn the 3rd kind of compensation), all fee-BASED indicates is your financial advisor will take costs AND commissions from selling insurance and investment products and services! So a "base" of these compensation might be associated with a share of the resources they manage in your behalf, then your "icing on the cake" could be the commission income they could probably generate by selling you commission driven expense and insurance products.