What Does a Financial Advisor Cost?
Financial advisors are paid in one of three ways: commissions on the products you buy, fees based on the assets they manage or a flat or hourly fee for advice, or a combination. At Focused Financial Group, compensation depends on the services you choose, and our Form CRS, linked at the bottom of every page, explains each option. This page explains the three models in plain English so you know what to ask.
What is commission-based compensation?
When you buy an insurance policy, an annuity or certain investments through a broker-dealer, the issuing company pays the advisor a commission. You do not write a separate check, but the cost is built into the product. The advisor is paid at the time of the transaction, so this model fits needs that are transactional, such as buying life insurance, and the conflict to be aware of is an incentive to recommend products that pay a commission.
What is fee-based compensation?
In an advisory account, you pay an ongoing fee, usually a percentage of the assets in the account each year, for management and advice. The fee is disclosed in the advisory agreement and deducted from the account. The advisor is paid as long as you remain a client, so the incentive is aligned with keeping you satisfied over time, and the conflict to be aware of is an incentive to recommend moving assets into an advisory account.
What does "fee-based" versus "fee-only" mean?
A fee-only advisor is paid solely by clients and earns no commissions. A fee-based advisor may earn both fees and commissions. Focused Financial Group's advisors are fee-based: we can be paid by commission, by advisory fee, or both, depending on what you choose. We think the right question is not which label an advisor wears but whether the compensation for each recommendation is disclosed and makes sense for the service.
Does it cost anything to meet with you?
No. The first meeting is free with no obligation. If you decide to work with us, we explain what each recommendation costs and how we are paid before you sign anything.
Where can I see the details?
The Principal Securities Form CRS (Customer Relationship Summary) describes the services, fees, costs, conflicts of interest and disciplinary history of the broker-dealer and investment adviser. Product-specific costs are in each product's prospectus or policy illustration. Ask us to walk through any of it.
Talk with us
Call 770-250-7588 or use the Contact Us page. Bring your questions about cost; we would rather answer them first.