Business and Management

How To Financial Advisors Get Paid?

There are six main ways that financial advisers get paid:

1. Pay-Per Trade – Most of the dealers use this approach. The adviser takes a flat fee or a percentage fee every time the client buys, sells or invests.

2. Fee-only – This type of financial advisors are very small in numbers. They charge an hourly fee while giving advice and helping to manage money.

3. Commission-based – Most of the advisers get paid mainly from commissions by the companies whose products they sell to people.Long and short term financing options provided by these financial advisors.

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4. Fee-based – Commission-based may not give the best returns to savers. To overcome clients' possible mistrust of their motives in making investment recommendations, many advisers now claim to be 'fee-based'.

5. Free! –In this, we get expert advice about where to put money completely free of charge. The bank is only offering a limited range of products from just a few financial services companies and the bank's adviser is a commission-based salesperson. With both the bank and the adviser taking a cut for every product sold to people that inevitably reduce savings.

6. Performance-related – There are a few advisers who will accept to work for somewhere between ten and twenty percent of the annual profits made on their clients' investments. This is usually only available to wealthier clients with investment portfolios of over a million pounds.

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