There are times when we face financial complications and sometimes crisis. And most of us take services of financial advisors to get out the complications and to manage their expenses.
It’s very important that we are aware of the charges that a financial advisor may charge for providing financial services. Financial advisors fees varies from individual to individual, some charge more and some charge less for their services depending on their education and experience.
Let’s talk about in how many ways a financial advisor charge for his/her services.
1. Fee-only method:
Fee-only advisors give advice to their clients according to their financial situation and as well as they will be looking to sell their products.
2. Commission:
This is what people need to understand that what is Commission fee? The standard commission fee of financial advisors is 1 to 2% of a client’s assets. It can be generated from individual stock or from the company but they will get it after they completed their services for you.
3. Understanding the commission and fee system:
Understanding the difference between commission and fee-based charges make it easier for you to get the help of financial advisors. Now that commission is generated from individual stock and mutual funds and many things like these. While the fee is originated from a client or more like paying upfront, for example, that you are taking services of financial advisors you will decide the fees with them before they give you their services.
4. Hourly Rates:
Many of the financial advisors will charge you on an hourly basis, some of them will give you their services on basis of hours per week. Some of them will charge on hours per day method. Some of them will ask you what method you want to pay them which makes it easier for you.
5. Percentages of Account Value:
Now, this is bit technical and most of the people do not know about it that how financial advisors charge their service from it. For example, if you have account value ranging 50,000-100,000 dollars then there will be a fixed rate of Annual fee. This is where you should keep yourself up to date and pay your financial advisors.
