top of page

A Financial Coaching Blog

Send us an email at blog@monthlyfinancialcoaching.com if you have a topic you would like discussed.

Search

FOUR WAYS FINANCIAL PROS CHARGE

  • Writer: Treavor Dodsworth CFP®, CPA, CKA®
    Treavor Dodsworth CFP®, CPA, CKA®
  • May 23
  • 2 min read

There are generally four different ways financial professionals charge. Knowing how the professional you are working with is receiving their compensation can help you be aware of underlying conflicts of interest that may exist.

Track It

  1. Commissions - Oftentimes professionals in the insurance industry or certain financial advisors dealing with investments will make their compensation by selling a product. Typically they receive some percentage of the product they sell.

    Possible conflict: There could be a desire to sell something that isn't a good fit for the client.


  1. Assets Under Management or AUM - This one is specific to investment advisors and involves charging a percentage of the amount of assets they are managing.

    Possible conflict: Some questions come with increased conflict. For example, should I take money out of this investment account and pay down debt.


  2. Fixed Fee - Fixed fee may involve either ongoing or one time projects. The price is typically set and black and white from the outset.

    Possible conflict: Similar to what sometimes happens with subscriptions, the fixed fee could just keep coming in even when the service is no longer being used.


  3. Hourly - An hourly rate is multiplied by the amount of time spent to complete your project or question.

    Possible conflict: There could be a desire to spend too much time on a project (higher billable hours) or not enough time for the project (in an attempt to keep the bill low).


While there is no fee system that is perfect, there are some that may be preferable for the individual problem you are trying to solve. Being aware of the conflicts of interest that may exist can help you mitigate negative ramifications.

 
 

All written content on this website is for information purposes only. Material presented is believed to be from reliable sources and no representations are made by our firm as to another parties’ informational accuracy or completeness. The owner of this website takes great care to thoroughly research the information provided to ensure that it is accurate and current. Nonetheless, the content on this website is not intended to provide tax, legal, accounting, financial, or professional advice, and readers are advised to seek out qualified professionals that provide advice on these issues. All information or ideas provided should be discussed in detail with an advisor, accountant, legal counsel, and/or other pertinent professionals prior to implementation. In addition, the owner cannot guarantee that the information on this website has not been outdated or otherwise rendered incorrect by subsequent new research, legislation, or other changes in law or binding guidance. Neither Monthly Financial Coaching or it's owner shall have any liability or responsibility to any individual or entity with respect to losses or damages caused or alleged to be caused, directly or indirectly, by the information contained on this website. In addition, any advice, articles, or commentary included on this website do not constitute a tax opinion and are not intended or written to be used, nor can they be used, by any taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer. Any mention of an investment product or solution is not a recommendation to buy or sell. Past performance is not a guarantee of future results. Any mention of rates or return should not be seen as a guarantee those rates or return will be received.

bottom of page