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About Preet Banerjee
True fee-only advisers are compensated solely from fees charged directly to you. They receive no income from the fund companies (or other investment product providers), nor do they receive monies based on a periodic deduction from your account related to the size of your portfolio (those are fee-based advisers). They also would not execute trades or otherwise directly manage your portfolio. MORE
The majority of mutual funds include the cost of advice in their management expense ratios. What muddies the waters is that some advisers provide comprehensive financial planning and others may only provide investment selection advice. In most cases, the costs are fixed, yet the value is quite variable. MORE
You meet with a new financial adviser, give him or her $100,000 to invest and he or she will provide you with a financial plan and an investment policy statement (hopefully). Your $100,000 goes to work in the markets. Let’s say that the adviser spent 5 to 10 hours preparing and executing your plan. He or she generates $5,000 in commissions, which is split with the firm, but you don’t get a bill. From your perspective, all of the $100,000 you invested shows up on your transaction confirmation slip in a shiny new investment portfolio. MORE
I once worked with a stockbroker who never sat down. I had a clear view into his office from my desk, and every day he would pace around the circumference of his desk for the better part of the day. Headset in tow, he would be on the phone with clients all day long. For him, the number of phone calls he made directly correlated with his income. MORE