How are financial planners paid?
Planners can be paid in many different ways including commissions on the sale of products, salary, fee-for-service or hourly rates, flat rates for specific services or be paid a fee based on a percentage of assets or income. How you pay for the services of your planner should be discussed at the outset. It may be that your planner will offer you a choice of how he or she might be compensated depending on the services you want. However, it is very important that the planner disclose in writing how he or she will be paid for the services provided.
A. There is currently no uniform method by which financial planners are paid. A planner can be paid by a salary paid by the company for which the planner works; by fees based on an hourly rate, a flat rate, or on a percentage of your assets and/or income; by commissions paid by a third party from the products sold to you to carry out the financial planning recommendations; or by a combination of fees and commissions whereby fees are charged for the amount of work done to develop financial planning recommendations and commissions are received from any products sold. Be sure to ask the planner how he or she is paid.
