When considering hiring a financial planner to assist you with your financial planning decisions it is very important to make sure that you are getting a financial planner who will give you unbiased advice and who is truly on your side. One of the best ways to ensure that you are making the right hiring decision is to ask your potential financial planners what type of fee structure they use. When you make the decision to use a financial planner you will only have a need for a planner if you have money that you wish to invest or protect. In order to hire a professional to give you this advice it will obviously cost you money. However, you do want to make sure that you are paying the person who will be on your own side.
One of the most important decisions that you will need to make regarding your financial planners is whether or not they get their fees as a fee based structure or a commission based fee. This is really important because the question is not only whether you will be paying your financial planners a flat rate fee or whether you will be paying a fee determined by the type of fund that your financial planner decide to choose for you. When you meet with potential financial planners to decide which one you will go with you will need to have them give you their official fee structure so you can determine which one is right for you.
There has been a big trend recently towards a flat fee based payment structure because this allows the financial planner to give you unbiased advice. If you enlist the services of a commission based planner you will be subjecting yourself to financial options which may not be in your best interest. The reason that a financial planner might recommend a financial instrument that might not be in your best interest is because they might actually get paid a higher commission if you pick this one fund over another. Whereas, if you choose a fee based financial planner you will pay them a set amount of money and then they will give you the advice that they have without skewing that advice based on which fund you select.
When you make these difficult decisions they should be made with your best interest in mind. You might be swayed by the sales techniques of a commission based advisor but that is only because they are trained sales professionals. If you choose to work with financial planners based on a flat fee structure you will be working with folks who are looking out for your best interests.