Compensation
Depending on what licenses a financial advisor carrier and what product/services they offer, an investment professional such as a financial advisor will be compensated in the following ways:
- An hourly fee for advisory services;
- A flat fee, such as $500 per year, for an annual portfolio review or $2,000 for a financial plan;
- A commission on the securities bought or sold, such as $12 per trade;
- A fee (sometimes called a “load”) based on the amount invested in a mutual fund or variable annuity;
- A “mark-up”: when one buys “house” products (such as bonds that the broker holds in inventory), or a “mark-down” when they are sold;
- A fee for assets under management, such as 1% for assets managed.
Read more about this topic: Financial Adviser
Famous quotes containing the word compensation:
“I have everything in the world that is necessary to happiness, good faith, good friends and all the work I can possibly do. I think God’s greatest blessing to the human race was when He sent man forth into the world to earn his bread by the sweat of his face. I believe in toil, in the dignity of labor, but I also believe in adequate compensation for that toil.”
—Anna Howard Shaw (1847–1919)
“In compensation for considerable disgust, despondency, and boredom—such as living in solitude without friends, books, duties, or passions necessarily entails—we are given those quarter-hours of deepest communion with ourselves and nature. Those who completely barricade themselves from boredom, barricade themselves from themselves as well: they will never get to drink the most refreshingly potent draught from the their own innermost fountain.”
—Friedrich Nietzsche (1844–1900)
“Many old people receive pensions for no other reason, it seems to me, but as a compensation for having lived a long time ago.”
—Henry David Thoreau (1817–1862)