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financial advisor | Sharkey, Howes & Javer

Why are you fee-only and what does that mean?

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SHJ team posing

Why are you fee-only and what does that mean?

We are often asked about our decision to be a fee-only financial planning firm. The term ‘fee’ occasionally throws people off, and we thought we should share about our decision and how it benefits our clients.

When we started the firm in 1990, we made the decision that we didn’t want to be bound to commissions. We wanted the freedom to make decisions based on the unique needs and goals of our clients. In short, we decided to be fee-only before fee-only was cool.

At the most basic level, fee-only simply means we are compensated solely by our clients, not by commission. As fee-only planners, we don’t earn commission from sales and we do not sell our clients products. Instead, we are required to act in the best interest of our clients — an important distinction.

At SH&J, we are paid by a percentage of the money under our management, and a flat fee for financial planning. In essence, our clients pay for our advice and our responsible investment management.

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3 Questions to Ask When Choosing a Financial Advisor

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Sharkey, Howes & Javer: 3 Questions to Ask When Choosing a Financial Advisor

Finances are intimately woven into our lives. Choosing a financial advisor to guide you in your financial decisions can be a stressful process, but an important one. Having the right financial advisor on your team gives you peace of mind and can put you on a good financial path.

Whether you are looking for a financial advisor for the first time or you are looking for a new advisor, here are some key questions to ask:

1. How are you compensated?

Starting with this question is key to understanding the type of financial advisor you are working with. They should be able to answer the question quickly and with specifics. Are they receiving kickbacks for recommending certain investments? Do they have sales quotas to meet? Are they paid by salary or commission? Are they recommending the same investments to all of their clients? Why or why not? A planner who is paid by commission or sales versus a salary or hourly rate could have an incentive to steer you in a specific direction.

Ask for information about all of their fees and how much you will be paying per transaction, product and service. Also, ask about any additional fees you can expect from other services they offer. If the advisor is unwilling to answer or vague in their responses, consider looking elsewhere for a financial advisor.

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