Financial Advisor Compensation Insights

Kimberly Watson, Editor in Chief
December 19, 2014 /

A financial advisor is generally compensated through fees, commissions, or a combination of both. For example, a financial advisor may be compensated in one or more of the following ways:[3]

  • 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 commission (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% annually of assets managed

 

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