If you have ever been involved in a financial transaction with a broker, adviser, or planner, the following questions may have crossed your mind...
"Is this product in my best interest, or in their best interest?"
"How will my adviser be compensated in this transaction?"
"Is there anything that might be influencing their recommendation toward this particular product or service?"
If so, you are not alone. The financial services industry and its compensation system is not as clearly understood as other industries. By knowing the “hows” and” whys” underneath the products and services offered, you may be in a better position to make smart choices with your money.
It goes without saying that each adviser deserves to be compensated in some way for the service and products that they provide consumers. Very few of us are naive enough to believe that they work on a pro-bono basis.
Understanding how advisers and agents are compensated can give you, the consumer, a better basis for understanding what may be right for you, or what could be a product recommended in self-interest.