Tuesday, November 6, 2012
It is important for a person to ensure that his or her retirement advisor is the best advocate for his or her personal interests. To do so, a person entering retirement and seeking the services of a retirement advisor should seek to learn how his or her advisor will be compensated for services rendered. A person might want to avoid paying his or her advisor on a commission basis. This might place the person in position where his or her advisor might only seek to advise the client on products that pay the highest commission to the advisor. In contrary to a commission based method of payment, a person might want to consider paying his or her advisor on a fee-based agreement. There is a downside to this type of payment style. Most fee-based payment agreements focus on the amount of assets that the client owns per year. While the amount that most take, one percent, seems small, the amount can quickly accumulate. A person might want to get his or her planner to establish a plan that will generate retirement income without much supervision. If a plan requires much supervision, the costs for maintaining the plan could become unbearable.
See Steve Vernon, The Best Way to Pay Your Retirement Advisor, MoneyWatch, CBS, Nov. 6, 2012.
Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this article to my attention.