13 Things Your Advisor Won’t Tell You

by Kirk Kinder on May 14, 2010

Good article in Yahoo today about things your advisor won’t tell you. Being a fee-only financial planner, I agree with all of them. I really see no reason to work with a commission planner anymore. That is so 1950s. You should be hiring someone to provide objective advice, not sell you product. My big piece of advice is to make sure the advisor is fee-only, not fee-based. Fee-based is another way to say commission-based. Usually, these guys put the word fee in their description so people think they are getting a fee-only advisor, but most of these guys still earn 70% of their revenue from commissions. This is a wolf in sheep’s clothing IMO.

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  • JT,

    Yes, fee-based is another smoke and mirrors tactic by many in the profession. Some fee-based do derive the vast majority of their income from fees, which is fine, but many are still commission salesmen disguised as objective advisors.

    I agree about realtors. I have done real estate transactions with and without realtors. I have to say that without was much easier. I sold my house myself in 2003, and it was a breeze. I was able to sit at the kitchen table with the prospective buyer, and we were able to look each other in the eye as we negotiated. We even got to the point where I traded a kitchen table for a car top carrier. Then we went to the real estate attorney who handled the details.

    There is no transparency in real estate because if there was realtors would find they are out of work. They fight to keep the MLS away from buyers since the business is essentially the MLS. Also, you never know when they say there is another bid, nor do you know the price. They use smoke and mirrors as an illusion. If all bids were listed, like with stocks and bonds or even ebay, we would see exactly what is going on and make more informed decisions.
  • JT_4
    Hmm, interesting. I didn't know about "fee-based" advisors. Yet another scam to be wary of, I suppose. It's good to hear you're fee-only, Kirk. :)

    Also, while we're at it, can we please reform the real estate market with their commission based Realtors? I'll be looking to buy a house in a few years and it would be nice to find a fee only agent who would actually work with my best interest in mind, as opposed to getting the highest sale price possible to boost their commission.
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