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Showing posts with label fee. Show all posts
Showing posts with label fee. Show all posts

October 26, 2014

Wealth managers versus brokers

Typically, wealth managers, also known as financial planners, earn their living either from commissions or by charging hourly or flat rates for their services. A commission is a fee paid whenever someone buys or sells a stock or other investment. You may want to avoid financial planners who rely on commissions for their income. These advisers may not be the most unbiased source of advice if they profit from steering you into particular products.
A growing number of financial planners make money only when you pay them a fee for their counsel. These financial planners don’t get a cut from life insurers or fund companies. You might pay them a flat fee, such as $1,500, for a financial plan. Or you could pay an annual fee, often 1% to 2% of all the assets—investment, retirement,  university savings and other accounts—they’re minding for you. Others charge by the hour, like lawyers.
You might also encounter financial planners who cater exclusively to the rich and refuse clients with less than $2 million to invest. Don’t take it personally—hugely successful planners in this range of wealth are called wealth managers and would just prefer to deal with big accounts rather than beginner clients. 
You want a planner who’ll make the time to focus on your concerns and is interested in growing with you.
If you have more than $2 Million to invest, look for the wealth managers usually found in the global banks.