Quote:
Originally Posted by fotze
I think it would be the same as a financial advisor steering you to stuff that pays a better commission. Please tell me that doesn't happen.
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Well this is probably not the time/place, but sure it happens.
I better explain before people get up in arms though. As far as investments go (mutual funds, stocks,etc.) the pay is basically equal across the board. So if you buy a fund through me from ABC company as opposed to DEF the pay is the same. It doesn't matter whether you pick one over the other because one has a blue logo and the other is red or anything like that; its totally even. I should note that there are some differences in the way that advisors get paid, and some varying amounts of some pieces, but its really minor stuff. I could go into detail if you like, but the reality is that compensation from my point of view is not a factor. You have to consider the source though: I'm an independent advisor - I own and operate my own practice. I make that distinction because there are companies out there where advisors get paid totally differently if they sell their products. In that case its a completely different model than what I'm talking about for me.
Insurance though is a whole other story. It depends on the contract that you have with the carriers and things like that. For me there isn't a whole lot of difference (the difference is in the magnitude of hundreds of dollars, which might sound like a lot, but really is not a big deal in case you're curious). Some guys though will make double the money by using one company over another for the same product. When you start getting discrepancies like that then you will likely be sold on that particular company over the one that pays half....and frankly in almost every case I would say that isn't a big deal. IF the policy is the exact same, and the cost to the client is the same or within say $1.00 per month then you can't blame a guy for that I guess. Its my practice to disclose the costs of a few major companies to clients and let them decide...but frankly there is no real difference for me compensation-wise and so its a matter of doing the best thing for clients.
MOST independent advisors operate in a manner like I describe, but surely there are some who do things differently. If your guy does though it doesn't mean that they are screwing you (to be totally clear!).