Investment Tips & Tools: How Advisors Get Compensated
There are a variety of ways that financial representatives are compensated. Below is general information on the most common methods of compensation.
Based on a percentage the advisor receives when selling a particular investment product to a client. An advisor should disclose any arrangement with a brokerage firm when recommending a product that would generate a commission.
Fees + Commission
When an advisor charges a fee for services rendered and then also collects a commission from the client’s purchase of a recommended investment product.
Based on an hourly rate or percentage of assets under management.
A flat rate paid to the advisor, typically regardless of products purchased or assets under management.
These can be expensive, punitive and complex products. Here's what you need to know.