Financial Planner - Conflicts of Interest

[sysco]

Colorado - I currently have a Financial Planner who is “fee-Based”. If I ASK him if he recieves commissions for any products he sells, (ie: conflicts of interest), is he obligated by Law to tell me? If I ASK him to tell me, in advance, of any of the “products” prior to his suggesting I invest in them, is he obligated by Law to tell me?What is the name of your state (only U.S. law)?

 

[Hot Topic]

You should never hitch your fortune to someone who gets paid a fee every time he or she gets you to invest in a stock. That's a definite conflict of interest, and it's highly likely that he or she will put h/h interests ahead of yours.

Get a new planner.

 

[stkj]

some investors prefer a fee-based relationship, if they do not like to pay an ongoing annual fee based on the assets within the account. I would say that if you have several trades per year, you might prefer a fee-only relationship (wrap fees, managed money accounts), but if you trade very seldom, a fee-based might be more economical. Then I would say, if you do not trust your advisor, find someone you do trust. It sounds as though you are getting some push back from your questions on commissions and possibly other issues. While it might be an uncomfortable conversation for your advisor, it is necessary. You should know if you are paying for the fees, or if the advisor is getting paid by another entity (ie- insurance carrier, etc.). If you are paying the fees, your advisor is legally bound to disclose any fees to you. The advisor is not obligated to tell you exactly what they are paid in net (according to their payout grid within their company), but they must tell you what amount you are paying for the investment, if any. They also should not have any issues with telling you what the carrier pays for the investment, even if this is not directly paid by you (it is ultimately paid by you indirectly). Trust is number one- if you do not have that, seek out another advisor. Good luck.