Course 202: Using Financial Services Wisely
Fee-Based Planners
In this course
1 Introduction
2 Full-Service Brokers
3 Fee-Based Planners
4 Discount Brokers
5 Market and Limit Orders
6 Buying on Margin
7 Shorting
8 The Bottom Line

If you still find the need for personalized, professional investment advice but want to avoid the conflicts of interest at full-service brokers, fee-based planners can be a worthy consideration. Fee-based planners usually charge their clients based on a variety of factors, and the way they get paid does not have a large inherent conflict of interest.

In general, planners and advisors get paid in one of three ways. First, they may charge you a percentage of your assets on an ongoing basis (say, 1% a year, not including brokerage costs or any expenses associated with mutual funds). Other planners charge a dollar rate on a per-job or hourly basis. Finally, others earn commissions on any products they sell you. Some planners may use a combination of these fee structures--for example, a planner might charge you an hourly rate to set up your plan and also put you in funds on which he or she earns a commission. The upshot is that most planners do not have the incentive to encourage frequent trading, but they can be just as(if not more) expensive as full-service brokers.

Next: Discount Brokers >>

Print Lesson |Feedback | Digg! digg it
Learn how to invest like a pro with Morningstar’s Investment Workbooks (John Wiley & Sons, 2004, 2005), available at online bookstores.
Copyright 2015 Morningstar, Inc. All rights reserved. Please read our Privacy Policy.
If you have questions or comments please contact Morningstar.