Unfortunately, there is no foolproof way to choose an ethical, qualified financial planner or investment adviser. In addition to varied educational backgrounds and credentials, financial advisers also have several different ways in which they are compensated; the following compensation explanations may help you decide which type of compensation plan with which you feel most comfortable:
Commission Only - No charge for financial planning or money management. Recommendation will consist of investment/financial products that charge commissions or fees - ask what the real cost is to you, this year and in the future.Fee-Based or Fee & Commission - Charges a fee for financial planning but recommendations will usually consist of investment/financial products that assess commissions or fees. The fee charged for planning may or may not be reduced by all commissions earned - ask for a detailed breakdown of costs, this year and in the future. Salaried - No charge but incentives and awards are often provided in addition to the salary when certain financial products are purchased based on their recommendations. Recommendations may consist of investment/financial products that charge commissions or fees - ask what the real cost is to you, this year and in the future.
Fee- Only - Charges an hourly fee or a percentage of your net worth for financial planning and a percentage of assets if they manage your money. Your cost to implement the financial or investment plan, above the fee paid, should be minimal. Most advisers charging a fee for financial/investment advice or money management should be Registered Investment Advisers with either the Secretary of State (SOS) or the Securities Exchange Commission (SEC). All Registered Investment Advisers are required to provide clients with a disclosure form called ADV Part II. This form should outline their education, employment history, licenses and all methods of compensation. If your adviser is charging a fee and is not registered, ask why.
Financial Planning Services, Inc. is a fee-only planning firm.
Financial Planning Services, Inc. fees are outlined in the firm’s ADV (see link below). The comprehensive plan fee is generally appropriate for complex estates. Most clients will enter into a planning agreement based on the hourly fee. In most cases, on-going money management clients are not charged an additional fee for financial planning services.