By working with a financial adviser, you’re giving them permission to look deeply into your financial life and wellbeing. Shouldn’t you know how they make their money as well?


As a family-owned firm in Edmond, OK, the team at Womack Investment Advisers, Inc understands that your financial health is an important part of planning for a family, investments, or retirement. We work with you to discover the right path towards healthy wealth management

financial adviser Edmond

How Does a Financial Adviser Get Paid?

Chances are each firm structures their payments a little differently. Some firms may also work with you to determine the best fee type based on your level of income and goals with financial advice. (1) 

"When choosing a financial advisor, it’s important to consider their fee structure, costs and possibly their incentive for making recommendations."


 Forbes.com

Some fee structures will work better for your circumstances than others, which is why its important to learn how your financial adviser of choice gets paid:


Client Fees

Many financial advisers base their revenue on management fees, performance fees, flat fees, or hourly fees. A management fee is typically a percentage-based fee on the amount of money they are handling for you.

A performance fee isn’t always included, but it enables the adviser to charge an additional fee for extraordinary results. Flat and hourly fees are based on project scope or time spent.


What Percentage Does a Financial Adviser Take?

The percentage a financial adviser can take from your investment depends on the agreed upon terms. Most commonly, this percentage is low, ranging from 1-5%.


Commissions

Commission-based advisers earn their fee when they sell specific financial products like funds or annuities to you. The commission does not come from your funds, but they may earn a small percentage from the product based on the total investment you make.


Salaries

Salary-based financial advisers are paid by the firm they work with. While these advisers may earn bonuses for reaching certain benchmarks, these bonuses come from the firm and are not commissions from your investment.

Dollars

Can a Financial Adviser Steal Your Money?

No, a financial adviser cannot steal your money. While it can be nerve-wracking to let someone else handle your finances, financial advisers are held to strict federal laws and regulations and are not permitted to commit theft.


Likewise, there is no guarantee in finances, and if you lose money based on or around advice the financial adviser gave, they cannot be held liable for the loss.


Fee Structures: Fee-Only and Fee-Based

When looking for a financial adviser, you may come across terms like “fee-only” or “fee-based” advisers.

Fee-only advisers do not receive commissions based on the amount of money they handle for you. Their income is generated from service fees such as flat, hourly, or percentage-based fees.


Fee-based advisers, however, earn their income commissions, typically in addition to some fees or related services.

Ready to take the next step towards your financial future? Get in touch with the professionals at Womack Investment Advisers today.




References:

          1.   Forbes.com, How Do Financial Advisors Get Paid?, https://www.forbes.com/sites/forbesfinancecouncil/2021/03/31/how-do-financial-advisors-get-paid/?sh=43342ee57dd3






DOWNLOAD ADV HERE



Share by: