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How Does a Financial Advisor Get Paid?

There are six main ways of getting paid to financial advisers:

1. Pay-Per Trade – This approach is employed by most dealers. Every time the customer buys sells or invests, the adviser takes a flat fee or a percentage charge.

2. Fee-only – This type of financial advisors is very small in numbers. They charge an hourly fee while giving advice and helping to manage money. Long and short term financing options provided by these financial advisors.

3. Commission-based – Most of the advisers get paid mainly from commissions by the companies whose products they sell to people.

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4. Fee-based – Commission-based savers may not be getting the best returns. Most advisors now claim to be ' fee-based ' to address the potential skepticism of clients regarding their motivations in making investment decisions.

5. Free –In this, we get expert advice about where to put money completely free of charge. Bank offers only a limited range of products from a few financial services companies and the bank's adviser is a salesperson based on commissions. Taking a cut for every product sold to people that inevitably reduces savings, both the bank and the adviser.

6. Performance-related – There are a few advisors who will accept between ten and twenty percent of the annual profits made on the investments of their clients to work for someplace. Typically this is only open to wealthy investors with investment accounts in excess of one million pounds.