Quote:
|
Originally Posted by The_Jazz
Advisors and brokers are both there to make money themselves, not out of the goodness of their hearts. If you aren't getting good advice, move your portfolio, but don't begrudge them their right to get paid. Yes, they should add value, but they should also get paid for that value.
|
Certainly, but the question is whether the advisor is being paid for advice or for making trades. If they're getting paid for making trades, they have a financial incentive to get you to make a lot of trades, even when your best interest might be in sinking everything into a low-cost mutual fund and letting it sit there for years.
Fee-only financial planners have no such incentive: they make the same amount of money no matter how many trades their advice involves, so their only incentive is to give you good advice so that you'll come back for more.
Update: Here's another good article about how to choose a financial planner, with a balanced summary of the commission vs. fee-only debate.
http://www.ricedelman.com/planning/chooseadvisor.asp