Lightning Round: Commission-Based Planners


Rich: I just sat down with a financial planner. He said all of his services were complimentary, because their income is based on performance. What does that mean? 


This planner, like much of the financial world, gets his income based on commissions.

When you buy a product through him, he'll be paid for his referral. This isn’t a bad thing, but it does have one significant problem: a conflict of interest.

For example: if you need life insurance there are at least fifteen different companies you could compare that all have different prices and terms. Your planner may not be motivated to pick the plan that is actually best for you, but will instead push you towards a certain company so he can get the best payout. 

Just know if someone doesn’t charge you a fee for their financial planning, they are not doing it through the kindness of their hearts. They’re getting money from someone and it’s important you know who that is before you go into business with them. 
 

THANKS FOR THE QUESTION, RICH! GLAD TO HAVE YOU LISTENING TO PURSUING A BETTER QUALITY OF LIFE BY LISTENING TO MORE THAN MONEY.