The experts say that, stereotypically, a fee-only financial planner is a better option than one who earns commissions on what he or she sells you. Why is this sometimes true?

What will be an ideal response?


Answer: Because of the agency relationship and self-interested behavior, a commission-earning financial planner may be more interested in the commissions he or she will earn versus what is best for your personal needs. There is the potential for the planner to recommend financial products that pay higher commissions, when these products may not be best suited to your individual needs, or when there may be less expensive options available. A fee-only planner has no such incentive, since the fees are not contingent on your financial decisions. The fee-only planner knows that he or she must do a good job or you will not continue to utilize their services or refer new business to them.

Business

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Self-monitoring is the extent to which people base their behavior on cues from other people and situations.

Answer the following statement true (T) or false (F)

Business

For consumer durables and other industrial products with long purchase cycles, ________ purchase is the key event

A) reinforcement B) bulk C) trial D) repeat purchase

Business

Less restrictive policies and procedures and less standardized operating methods

A. increase groupthink within organizations. B. make an organization more centralized and mechanistic. C. allow organizations to be more flexible. D. make it difficult for organizations to respond quickly . E. widen the span of control in an organization.

Business

Which of the following statements is MOST correct concerning the relationship between a

company's cash budget and its income statement? A) If net income is positive, then cash flow must be positive. B) If net income is positive, then cash flow could be positive or negative, but if net income is negative, cash flow must also be negative. C) If net income is positive for 3 or more months in a row, then cash flow must be positive. D) Cash flow could be positive whether net income is positive or negative.

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