Why You Should Care How Your Financial Advisor Makes Money
- Topics:
- Commercial Lending
- Tags:
- Advisor,
- Sales,
- Investment,
- Incentive,
- Human Resources,
- FundAdvice.com,
- Financial Industry,
- Financial Accounting,
- Financial,
- Finance,
- ...
- Source:
- FundAdvice.com
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Overview: One of the most important things one can do when they hire a financial advisor is to be as clear as possible about how are they paying that advisor. Although it is an uncomfortable area for many people, compensation is one of the most basic things one must understand when they enter into any professional relationship that involves money. There are four basic forms of compensation, discussed in the article with many hybrid combinations. Each one of these forms of compensation gives the advisor some sort of incentive. A broker whose compensation depends on transactions has a financial incentive to generate transactions in the account. The financial industry is a sales business, and salespeople are given incentives to sell.
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Format: HTML | Date: Jan 2003 | Pages: 1
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