Ken and Daria Dolan are widely known as America's First Family of Personal Finance.
QUESTION: My wife and I are trying to get our finances in order headed into the new year, and we feel like it's time to sit down with someone who can help, but we don't know how much a financial planner will cost. What should we be prepared for cost-wise?
George, first of all, congratulations to both of you for focusing on your finances!
You've taken a big step toward financial success in the new year! The answer to your question about costs depends on what kind of financial planner you choose.
There are typically 3 ways planners charge:
1. Commission only:
This type of planner doesn't charge you a fee for the plan he creates for you. Instead, as with a full service broker, he makes money only when you purchase one of the financial products that the planner recommends. His entire compensation is the commission on the sale.
As you can see, there's a potential conflict of interest by your financial planner: is he recommending a product because it is the right one for you and your unique needs, or is he recommending it because the company behind it will pay him a big fat commission when you buy it?