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How Do Financial Advisors Make Their Money?

Financial Advisors make money by managing the personal assets of other people. For financial planners and advisors, especially for companies or business, they devise a specific portion off the sale, or charge for their service fees and accept lower interest. Financial advisors make their money differently from hedge fund managers as well as experts in investments who directly manage the wealth. A financial planner will invest into the assets, funds or bonds that are administered by private companies. A regular update each year is suggested. Most profitable financial advisors work for at least three or four days per week, have a secretary that manages the office business and have hundreds or even thousands of clients.

In the world of finances, everything gulps down to the entirety of the client base that you have acquired. For instance, a client list of 2000 regular costumers yields about $ 40,000 in renewals on a daily basis. Thus, every year, financial advisors make their money by having a financial planning practice. The number and volume of the costumers will make up the salary. Most financial advisors make their money by trying to achieve this part where most of their income are derived from renewal and investments, since renewals on business or personal investments are the rest of the life of the investment from renewal on investments are the rest of the life of investment since these renewals on investments are the continuity of the investment wherein the renewals from insurance could last for a longer year. Most financial companies and banks in USA still provide lifetime renewals.

Then again, investment experts are those professionals who have license with stock broking and would promptly invest the asset into some stocks. Anyone can pose as a financial advisor. There is no required college degree, background or club membership and no regulations that define being financial advisor making their money. Of the thousands of people calling themselves financial advisors, only about a few hundred have acquired the Certified Financial Planner Mark (ChFC) or Personal Financial Specialist (PFS), the financial planning mark is provided by the financial industries. Even if the financial planner has one of these professional marks, you will not be home free. Normally, it would take years of experience and continuing education to become a really credible, respected and well-paid financial advisor.

In the early 1990s, financial advisors make their money but they don't have those very yearning image because of commissions. Even those big financial houses such as Merrill & Lynch observed that their clients would rather pay charges than hire services of financial advisors who would ask for commissions for the investment they secure. Most financial advisors make their money from commissions. Most would call their services as fee-based planners, or simply by disclosing the real information on how they would get their income.

There is nothing bad with financial advisors making their money from commissions. However, the financial advisor should disclose the information beforehand for the client to clarify things. Being a financial advisor is a great job. Revealing accurate information on how they make money should not be concealed.