I previously wrote about What to Look For in a Financial Advisor. In that post I briefly talked about how the advisor gets paid. I want to expand on that topic today. Overall, there are three main ways an advisor is compensated. Commission-Based Fee-Based Fee-Only Commission-Based When an advisor gets paid by commission, they are getting paid by placing you into specific investments. Most times, the firm the advisor works for has a deal in place with a fund company to earn a commission. The advisor could also earn a commission in the trades they place. While there are many great advisors out there that are commission based, I have a hard time trusting them. My reasoning is because you are entrusting them with investing your … [Read more...]