The Business Journal

Posts Tagged ‘financial institution’

Many banks, credit unions, savings and loans, and other organizations that offer financial planning provide the service through a salaried planner. While these planners do not have as strong an incentive to sell products as do commission oriented planners, they still steer you toward products offered by their financial institution,on which the institution earns a sales fee. If most of the salaried planner’sclients execute his or her advice outside the bank or other financial institution, the planner probably will not keep his or her job for very long.

From these descriptions, a fee-only planner probably sounds best; however,
this alternative also has several drawbacks. First, not many fee-only planners exist.Second, because these planners make their living only from fees, you typically need enough cash and assets to justify their fees. Depending on the planner, that may mean as much as $100,000 or more. Third, you must take the initiative to follow up on a fee-only planner’s advice.

This means contacting other financial service companies, such as insurance or mutual fund firms. Therefore, don’t dismiss commission-only, fee and commission, and salaried planners. Many of them are truly helpful professionals, and the commissions or salaries they earn by selling products may help keep the cost of their services within your reach. Just remember,when such a planner makes recommendations, be as fully informed as possible about his or her background and incentives as you decide how much of the advice to implement.