As you investigate financial advisors and the various methods financial advisors and financial planners use to charge for their services, you should become aware of the benefits of using an hourly, fee-only financial planner.
There are two big conflicts of interest in financial advice. The first is assets under management fees or A.U.M. fees for short. The conflict of interest in this type of fee comes from the fact the advisor earns more money from you when the account they manage is bigger. At first this may sound like a great motivation for the advisor to invest your money well, but there are times when it can be detrimental to your financial well-being, in addition to being very expensive when you actually calculate the fee.
A few examples include the financial advisor investing your account at too high a risk level. They do this in an effort to grow the account, but in a down market, the losses you experience could be very stressful for you.
They may discourage you from investing in rental real estate, even if it is a good investment. Also, they may not suggest funding a 529 plan with an up-front lump-sum amount taken from your investment account because it would lower their ongoing fees.
The second serious conflict of interest in financial services is selling insurance and insurance products like annuities for commissions. Obviously, it is difficult to trust someone who benefits financially from the sale of a product they are recommending.
At Andrew Marshall Financial, LLC we are hourly and fee-only financial planners. We do not offer AUM services and we do not sell insurance products.
By doing business this way, we avoid the two main conflicts of interest I just described. I invite you to schedule a free, first meeting to see if our services would be a good fit with your current needs.
Schedule a meeting by clicking here.
