The financial planning industry is moving towards a fee for service model. This has some pros and cons you need to consider before taking action.
Pros Financial advisers who charge a fee for service are charging you the same way accountants or lawyers charge – an upfront fixed amount, or hourly rate for their advice. These advisers believe they have the skills to provide quality advice that adds significant value to your financial position.
Typically, fee for service advice is charged by independent financial planners who do not earn their living through product commissions or via receiving a percentage of the investments they manage on your behalf.
Cons The main issue with fee for service advice is that you will need to pay the advice fee up-front. This fee is often in excess of $5,000. This can feel risky when you don’t know what the advice will be.
Despite this con, at least you know the adviser is only acting in your best interests, which in the long term is the most important thing.
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General advice disclaimer
This is general information only and does not take into account your personal objectives, financial situation or needs. You should assess whether the information is appropriate for you having regard to your objectives, financial situation and needs and consider obtaining independent professional advice before making an investment decision. If information relates to a specific financial product you should obtain a copy of the product disclosure statement for that product and consider that statement before make a decision whether to acquire the product.