Financial Adviser - Compensation

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:

  1. An hourly fee for advisory services;
  2. A flat fee, such as $500 per year, for an annual portfolio review or $2,000 for a financial plan;
  3. A commission on the securities bought or sold, such as $12 per trade;
  4. A fee (sometimes called a “load”) based on the amount invested in a mutual fund or variable annuity;
  5. 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;
  6. A fee for assets under management, such as 1% for assets managed.

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