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:
“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)
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—Vladimir Nabokov (1899–1977)
“The compensation of a very early success is a conviction that life is a romantic matter. In the best sense one stays young.”
—F. Scott Fitzgerald (1896–1940)