Fee only investment planners

In fact, according to just about every analysis of funds that exist, the best overall performance comes from index funds with low fees. I personally believe this should be illegal, but in today’s system, it is not only allowed but very common. A fee-only financial advisor cannot receive compensation from a brokerage firm, a mutual fund company, an insurance company, or any other source besides you, the client.

FAQ about fee-only financial planners in India

There are many benefits to working with someone who is compensated solely by what he or she charges directly to clients, and not from the commissions earned from the sale of financial products or financial transactions. But there are drawbacks. Let’s review and discuss the options. There has been some debate as to how «fee-only» compensation should be defined — mainly, whether it should include the second group, those who charge based on AUM. Generally, though, most agree, fee-only refers to payment from fixed, flat, hourly, or percentage-based fees. In fact, in there are some registered reps and others who earn all or part of their compensation via commission that may be required to favor products offered by their employer — which may or may not be the best vehicles for your situation. Since fee-only advisors do not sell commission-based products, receive referral fees, or other forms of compensation, the potential for conflicts of interest is limited.

Why a fee-only financial planner makes sense

Last Updated on November 19, at am. Financial advice is provided and clients are expected to take necessary action on their own. Created in , This list is the oldest of its kind. More than of freefincal readers and user are working with these planners. See results of a recent survey: Are clients happy with fee-only financial advisors? The investment is done through the planner.

Fee only means you pay no commissions

Last Updated on November 19, at am. Financial advice is provided and clients are expected to take necessary action on their.

Created inThis list is the oldest of its kind. More than of freefincal readers and user are working with these planners. See results of a recent survey: Are clients happy with fee-only financial advisors? The investment is done through the planner. As with anything in life, there are exceptions to this typical behaviour.

Unfortunately, exceptions do not make good examples. That is, it is illegal to practice fee-based advisory. The idea is to avoid the conflict of interest that inevitably tags along with commission-based product recommendation.

Unfortunately, many fee-based financial planners have chosen to ignore this regulation. Some have shifted their distribution business in the name of a family member. In that post, I had urged readers to choose fee-only planners over fee-based planners and mentioned that I maintain a list of fee-only planners that I would share on request. I did not post the list of fee-only planners in that article because I wanted to check for myself if there is a demand for clean paid-advisory.

I figured, if there is a demand, it would encourage more such requests. I have sent that list to over 50 people and still continue to receive requests. Please look at the comments in that article to understand what I referring to.

The message is clear: The number of fee only investment planners who seek paid-advisory may be small but among that small number, people who seek paid-advisory free from conflict of interest is a majority!

If I, with my insignificant blog can generate a non-zero interest in fee-only planning. Imagine what would happen if this is advertised on a wider scale? Of course, that is unlikely to happen for obvious reasons! No matter. I am a fan of fee-only financial planners. Before I present the list, I request you to consider the following points presented in the form of an FAQ. I am saying that that obvious conflicts of interest associated with commission-based advisory are absent in fee-only advisory.

Therefore, it is relatively cleaner. The trouble is with finding one! I am already engaging the services of a fee-based planner. Should I shift to a fee-only planner? You might want to shift to direct mutual funds. You will understand what I mean better! I have heard a lot of psychobabble about how human beings have some conflict of interest or other, blah blah! Unfortunately, the babble has emanated from fee-based planners! So I refuse to take it seriously!

From what I know, you need three entities to have a conflict of. For a fee-based planner it the individual, client and fund house or insurer.

Yes, I an endorsing their stand that commission-based advisory leads to a conflict of. I believe their stand should be supported. I have interacted with the planners over email and confirmed that they do not distribute mutual funds.

I cannot comment on their individual competence. However, if I wanted professional advice, I will go to one on this list. I believe the confidence to not jump into bandwagons has non-zero competence tagged with it. Are you receiving any kind of money from the fee-based planners for publishing this list? Choose a planner in your town or city. I think face-to-face contact is very important. If this is not possible, go for online advisory.

Instead, If you can find a fee-based planner in your city, who has no issues with your investing directly, go for it! There are many fee-based planners who encourage clients to invest directly if they wanted to.

Why have you not included them in this list? Matter of policy! Tough call for me as some of those guys are people who I can refer to as friends. I am surprised to find that some famous bloggers who offer services are missing from the list! Why is this so? Yes me too! Due diligence! Check out their website, understand the nature of the service, what they will do and what will not do for the fee and what you must. Email them or speak to them via phone or skype and clear any doubts if you.

Start the engagement when you are comfortable with the person and clear about what you are paying. I am a fee-only planner or I know of a fee-only planner. Can you add them to this fee only investment planners Please send me the contact details. I will contact the planner via email, confirm their profile and add them to the list.

Sure why not! You might want to read this first though: What does it take to do your own financial planning? If you find out that this is happening, please inform me. This is the least we can do to promote fee-only advisory. This list is pathetically short! Someday I hope fee-only advisory thrives in India no harm in dreaming right! Location does not matter! These planners work with clients from all over the globe and it is perfectly possible to work online.

Thanks dear Pattu, not only for supporting the infant financial planning profession, but for trying to make the financial advisory picture more clear for the investors. During a few conversations amongst advisers on social media, over the topic of a viable financial planning model, I have tried to present the side of fee-only model as being rich in commitment though poor in revenue in the short term. It was two years back when before starting, I checked some of the websites of financial planners globally and found only the «fee-only» model as the most appealing.

This was because I felt this model as being most close to making financial planning a true profession by as you say being devoid of any conflict of. First the SEBI’s IA Regulations, and then your write-up, are being a ‘good initial return’ on our ’emotional investment’ made for the long term in our dear profession.

Your best post till date! Person like you is always rare in our society who dares to call a spade a spade and at the same time who is a dreamer and doer. Best wishes for you. Dear Mr. Pattu, Thanks for the wonderful article and your faith in the ‘rare breed’ of Fee-only financial planners!

Just to share with you, when I was planning to start my practice as a financial planner, I did a survey of about families in Gurgaon-NCR. Most of them were taking ad hoc decisions, in most of the families only one person read male members were taking all decisions and personal finance meant ‘Investments’ only…or sometimes taking home loan!

Their was lack of trust as well particularly when their money was not ‘doubled’ or increased as per the promises made by the agents. Also, I realised that it is not always that the advisers were to be blamed but some part of blame goes to these people also …they slog day and night to earn money and do not want to spare even a single day in the year to ‘take care’ of this money.

Some of them even signed papers without reading! I strongly felt that this has to be changed and hence started my blog and workshops.

I am doing my little bit…and like you I am also dreaming to have Fee-only financial planning to be accepted and thrive in our country!! Nice details Shilpi. I agree, there is tremendous value which people can gain in personal finance but don’t realize it exists. Probably, if fee-only FP can help them it will be great. I wish you and all of other FP to actually help people see this value and benefit.

Great article. Being from Chennai I know you are also from ChennaiI am surprised no Chennai based Fee-only planner made it to your list yet. Has this concept not yet caught up in south?

I know a couple of SEBI registered planners. However, I am not sure if they are fee-only planners or how they handle product execution. Thank you for sharing Ms Johri. It takes extraordinary conviction and courage to choose a different path and make a stand. Commission-based selling can never be holistic by definition.

Find out how and how much an investment advisor charges

Critics of fee-only argue that this sort of arrangement tends to be more expensive. Advisors who only receive commissions based on the sale of a product or a financial transaction, such as a stock trade. The Bottom Line. What you decide to do with your money is up to you. However, if investmenr want advice on retirement planning, and do not necessarily need to buy a specific product, an advisor who charges fee only investment planners fees may be fee only investment planners right choice. We operate independently from our advertising sales team. Plannes both agree that an intermediate-term bond fund makes the most sense for you. Between books, online resources, and low-cost robo-advising tools, you can put a basic financial plan together without an MBA. Also, some states limit an advisor’s ability to charge a fee for the analysis of just on,y products or needs. There are many benefits to working with someone who is compensated solely by what he or she charges directly to clients, and not from the commissions earned from the sale of financial products or financial transactions. After all, that’s what hiring a financial planner is all. Engagements may be one-time or invvestment.