Furthering relationships obviously relies on doing what's best for the audience they serve. But not all conflicts are as easily identifiable as that question. Dan Moisand, a CFP licensee who serves on the CFP's Board of Practice Standards, said all compensation arrangements have potential flaws. For fee-based advisers, any sort of gift funds or asset consumption results in lower assets under management and, therefore, in reduced fees. A potential conflict of interest will arise anytime a client moves assets away from the account, for whatever reason.
Some advisers use a fee-offset payment model.
This is where they charge clients fees, but if commissions are made as well, they are subtracted from the fee, so both parties benefit. Whatever structure they choose, planners agree that the best solution to fee conflicts is ensuring that clients understand how the planner benefits from that structure. Calif. He sends out monthly newsletters to clients with industry updates. Besides compensation models, specific financial strategies can cause payment conflict between clients and their advisers. Investing in insurance products, especially variable annuities, and paying off debt are just two examples.