Money can’t buy these financial plans.
One question we are often asked is, “What is fee-based financial planning?”
This is because fee-based financial planning is our approach to helping clients manage their money, and they want to know what it means and how it affects them.
Of course, the term is a bit of a misnomer; it suggests that clients pay a fee for our financial planning services. But in fact, it means so much more.
When a financial planner or advisor invests a client’s funds into an account, they are paid a percentage of the assets under management. That is, the advisor receives payment by managing your investments.
Benefits of Fee-based Financial Planners
The real benefit of fee-based planning is the advisor’s incentive to grow your account. Because they only get paid more when they manage more, they are motivated that much more to work toward your investment goals. This typically works to the client’s advantage, because it eliminates the conflict of interest when advisors only recommend products that pay a commission.
Fee-based financial planning is typically more holistic. Rather than focusing on just investments or just insurance, the fee-based model encompasses all aspects of a client’s financial needs. This can include estate planning, cash-flow planning, taxes, retirement, insurance, and investments – all of which affect your goals in different ways, at different points in your life.
Most importantly, our approach to financial planning helps to address some of the pressures to buy or sell investments. This is because our compensation in our financial planning accounts is not tied to trading activity or the sale of investment products.
Simply put, fee-based financial planning strives to keep your best interests at the forefront of the planning process rather than focusing on a specific investment.
If you would like to discuss the fee-based model and how it impacts your financial goals, please feel free to contact Guidant Wealth Advisors at (847) 330-9911.