By: MoneySense staff | MoneySense.ca | October 1, 2012
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Is a fee-only planner right for you?
The main advantage of hiring a fee-only planner is that the payment system is more transparent than other systems. This means that you will always know how much you’re paying for financial advice, and your planner is less likely to have a conflict of interest.
Fee-only planners can be hard to find in Canada. Most financial planners are paid using the commission model. In that model, planners get most of their income in the form of commissions for selling you funds. However, a small group of planners have opted for the “fee-only” payment model, in which they get 100% of their income from their clients, and no money from fund companies. If you hire a fee-only planner who offers different payment
options, we recommend that you use the hourly fee option. This option puts your planner’s interests in line with yours. Your planner is less likely to receive payments from mutual fund and insurance companies for selling you product. But no matter what payment option you use, you should always ask your planner to list all commissions and fees he or she receives in writing, including sales commissions, trailer fees and referral fees…
