And still others operate thinly disguised Ponzi schemes. This adviser is either salaried or charges a certain amount to draw up a financial plan. He doesn't have products of his own to sell, such as stocks or real estate partnerships. Many financial planners receive at least some of their income from commissions earned on the products used to implement the plans they draw up for their clients. While this arrangement generally reduces the direct cost of a financial planner to an investor, it creates obvious conflicts of interest.
Some financial planners charge no fee but receive commissions on all the products they sell.
The customer benefits from one-stop shopping. Also, the customer will have to pay a commission no matter where the products are purchased. On the other hand, there's a strong possibility that the products aren't the most competitively priced or best performing when a commission is a key consideration. Look for a strong track record or education and job experience covering the bases of financial planning. Make sure that your planner stays current with the help of continuing education and training programs.