If you are an investor working with a financial advisor, it is only reasonable to expect that your advisor will provide you with advice that is suited to your specific circumstances. This is important because while investors with similar objectives and circumstances (age, investment objective, risk tolerance, etc.) may pursue similar investment approaches, small differences between such approaches can lead to big differences in investment results.<\/p>\n
For instance, if one investor\u2019s portfolio is 40 percent in bonds and 60 percent in stocks, while another\u2019s is 50\/50, this may not seem like a big deal. However, over 20 or 30 years, this seemingly small allocation difference could add up to significant differences in investment performance.<\/p>\n
The point here is that when you choose an investment advisor<\/strong> <\/a>or broker to help you make investment decisions, it is crucial that you fully understand your financial professional\u2019s approach to offering advice, both in terms of investing strategy and method of charging fees or commissions. For example, if one advisor charges much higher fees than another without achieving better investment results, you will end up with significantly less money in your account over time if you work with that advisor. In addition, if your financial professional\u2019s method of charging fees is not aligned with your investment objectives or style, it could lead to investment decisions that are not in your best interests.<\/p>\n In this article, we look at the difference between fee-based<\/a> and commission-based financial advisors and how to determine which method best fits your investment needs.<\/strong><\/p>\n Table of Contents<\/p>\n