We spoke with senior clients recently to find out if their advisor is fee- or commission-based and what they thought about how their financial professional is compensated. Following are highlights from those conversations.
If you have anecdotes or thoughts on the topic, leave a comment below or email me at [email protected].
My advisor is definitely fee-based. We’ve worked together for years and years and I can assure you we don’t hardly have a conversation without him charging me something. I’m somewhat kidding. He’s a great friend as well as my advisor, but he does work on a fee basis. We’ve worked through major market ups and downs and he’s helped me stay pretty clear of the biggest hiccups. I can’t complain.
- Barry M., 76, Denver
My wife and I have used both, and currently we use both. Our primary, I would call him our primary advisor, is a fee-only advisor. We have worked with a commission-type advisor on occasion, but our family is more skeptical of the commission-only approach. Whether we’re right or wrong on that bias, it is how we feel on the subject. It’s a trust issue for us. We did get burned on a deal in the ‘80s and that has stung us and stayed with us ever since so we have stuck, for the most part, with the fee approach. The fees have never been too much. They are within reason and we can live with that decision.
- Sam D, 72, Orlando, Fla.
Both of the advisors we work with work on commission. They work together in an office near the beach and have been family friends for year. They are a referral type of business and we have referred them to numerous friends of ours. In fact, we were awarded a few years back as their best clients and were taken on a cruise over to Catalina Island where we listened to music and ate surf and turf. That’s the kind of advisors they are. They will reward you for being a good client. I don’t know if I would expect a fee advisor to treat you like that or if it would be in their budget.
- Darrin, 71, Los Angeles
Our advisor is commission only. We have never paid for services with her. She even explained to us on one of our meetings that we would never be charged. It would always be a percentage of the transaction. We have sat down with her on numerous, what I call “life changing” decisions. Together, we have worked through wills, estate, property—pretty much all the financial decisions you can imagine. Both my husband and I have a great deal of trust and respect for our advisor and put complete faith in her that we will live well in our retirement. That was the first plan she put together—our big retirement plan. That was years and years ago and we revisit it every year.
- Carey, 70, Dallas
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