Different Ways The Financial Advisors Charge For Their Services

Financial advisors charge differently for their services. Some may charge you on hourly basis while, some may charge you in commissions. The top different ways through which a private wealth advisor will charge you are:

• As a commission when you buy financial or insurance products from them.
• A percentage of you assets. You may be charged around 1% - 2% of your assets every year. 
• Hourly rate
• A mix of fee and commission described as ‘fee-based’
• Flat fee for a complete project
• Retainer fee - quarter or annual basis

Now Lets See The Different Charges in Detail:

• Commissions

  This is the most common way a wealth management company charge their clients. Some offer good financial advises while others only think about the commission and so work as salespeople. Commission may be charged directly by the advisor or as a surrender charge on an annuity. You must have a clear idea about how the financial management advisor is going to be charged and how much commission he is going to get when you buy their recommended product.

• Fees As Percent of Your Asset Value

  This is one of the most common practices followed by private financial advisors to charge their clients. If you happen to come across such a financial advisor, it becomes important to understand whether they are only offering you investment planning or financial planning too. In case they offer you both services then you can expect them to charge you a higher fee. 
  
  
  In such kind of payment method, they will get a percentage value of your assets. This means their fee will increase as your assets grow and vice versa. So to make more money they will have the tendency to grow your assets. 
  
  
  In normal scenario, the fee can range between 0.50% - 2%. The fee amount will decrease, the more assets you have.

• Hourly Rate

  In case you are ready to implement the changes as per the advice, this can be the best way to pay for the financial advice. You can ask your private wealth advisor for an advice on hourly rate basis and then implement the suggested changes on your own. The hourly rate will vary depending on the experience and expertise of the advisors.

• Fees and Commissions

  A number of advisors collect fees and commission as a part of their wealth management services. So it is very important for the investment companies to understand the difference between a fee-based and a fee-only advisor.

• Flat Fee for A Complete Project

  When you want to plan a long term project then it would be better to have wealth management company on flat fee basis. Here the fee does not fluctuate over time and is not tied to any investment you make. You should make a point to ask for the flat fee rate upfront along with the kind of the services you want back for the money.

• Retainer Fee

  Sometimes you have complex situations to take care in life like managing rental properties, getting regular income out of the investment, a small business, etc. Based on the need, the advisor will tell you about his fees on quarterly or annual basis.