A common misunderstanding is how a Financial Advisor is compensated.
There are two main ways an IPG financial advisor is paid: Commissions and Fee-for-Service.
After your initial free consultation, your advisor will work with you to devise a strategy
that supports your financial objectives, no matter what your stage of life or investment
experience. Once that strategy is set in motion and you purchase investment or insurance
products, a commission to the advisor from the financial institution occurs. For most of
you, this is how your advisor will be compensated.
The second method is on a Fee-for-Service basis and this would entail an hourly rate for
services you determined with your advisor as necessary. The development of a Full Financial
Plan would fall under this system. This plan looks at your entire financial life and
provides you with a detailed written road map to achieve your short- and long-term goals.
It consists of cash flow planning, a retirement savings plan, a detailed investment plan,
and an overview of insurance and estate planning issues. It is proactively updated and
your assets rebalanced as per your arrangements with your advisor. This is an extensive
endeavor that requires a lot of research and constant maintenance.
It is important that you discuss the fee structure with your advisor as each advisor works
differently and they can individualize plans to suit you and your situation.
