How do Financial Planners Make Money?
Hello, 1. Commissions – There are essentially 3 types of payments: – One-time sales rewards, such as mutual fund “loads,” or the upfront payments that come from selling annuities and cash-value life insurance policies – Ongoing, annual service payments, such as annual commissions paid to insurance agents upon policy renewal – Commissions paid for transactions, such as buying and selling shares of stock 2. Fee Based on Percentage of Assets: Some planners charge a straight percentage of your total assets on an annual basis — either all assets (from your personal balance sheet) or just the assets they are helping you manage. 3. Fee Based on an Hourly Rate: Under this arrangement, you do the bulk of the work and pay the planner for information and advice on an as-needed basis — like the typical arrangement with a personal lawyer. Hope this helps – best of luck in your new career!
