A dishonest discussion of how you pay for financial planning and how much it costs.
This comes primarily in two forms:
Form #1. Quoting you some ridiculously low cost for the service/product or worse, telling you it’s free. It’s not free and it’s not as low cost as they tell you. If they tell you it’s free, it’s an outright lie. How would they be in business if it were free? You must ask yourself this question. If it sounds remarkably low, it is 99.99% likely that they only told you about a portion of the fee you pay, but represented it to you as if it were the entire fee. The rest gets buried in the fine print. Insist on full disclosure.
Form #2.This usually comes with some type of “you don’t pay me, the (insert “highly rated” product company name here) pays me.” Let’s do a quick analogy. You walk up to a McDonald’s counter to place your order. You order your meal. You ask “how much do I owe you?” The worker replies, “Oh, it’s free. The bun and meat suppliers decided to pay for your meal for you.” You would never accept this. It makes no sense. If you are the only one coming to the counter for something, why would they pay you to eat their product? It is similar with the financial products. You are paying. They are simply going to siphon it from your account. It’s hidden. Worse yet, ask yourself, is this advisor’s loyalty to you (the client) or to them (the product supplier)? Who is paying them?
Accept the truth. It is not wise to bury your head in the sand.
GET INFORMED ON VALUE AND HOW IT RELATES TO WHAT YOU PAY. DON’T FALL FOR EITHER OF THESE PLOYS.
