Top 5 Mistakes Financial Advisors Make

There is a straightforward but undeniable reality in the economic consulting and wealth planning industry that Wall Block has held as a "dirty small secret" for years. That dirty little, and usually ignored key is THE WAY YOUR FINANCIAL ADVISOR IS PAID DIRECTLY AFFECTS THEIR FINANCIAL ADVICE TO west palm beach financial advisor!

You want, and deserve (and consequently SHOULD EXPECT) neutral economic guidance in your best interests. But the truth is 99% of the general investing public has no idea how their economic advisor is compensated for the advice they provide. This can be a destructive oversight, yet an all also popular one. You will find three standard payment types for financial advisors - commissions based, fee-based, and fee-only.

Commission Based Economic Advisor - These advisors sell "loaded" or commission paying services and products like insurance, annuities, and filled common funds. The commission your economic advisor is earning in your deal may or may not be disclosed to you. I say "transaction" since that's what commission centered economic advisors do - they aid TRANSACTIONS. Once the transaction has ended, you might be fortunate to hear from them again because they've previously attained the majority of whatever commission they were going to earn.

Because these advisors are paid commissions that might or might not be disclosed, and the amounts can vary greatly based on the insurance and investment services and products they promote, there is an inherent struggle of interest in the economic assistance given for you and the commission these financial advisors earn. If their income is determined by transactions and selling insurance and investment services and products, THEY HAVE A FINANCIAL INCENTIVE TO SELL YOU WHATEVER PAYS THEM THE HIGHEST COMMISSION! That's not to imply there aren't some sincere and ethical commission centered advisors, but clearly this determines a conflict of interest.

Price Based Economic Advisor - Here's the real "dirty small secret" Wall Road doesn't need you to learn about. Wall Block (meaning the firms and agencies involved with getting, selling, or handling assets, insurance and investments) has enough blurred the lines involving the three methods your economic advisor might be compensated that 99% of the investing community believes that selecting a Fee-Based Financial Advisor is directly correlated with "honest, moral and unbiased" financial advice.