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STORM SEASON
Important Note:

June through November our agency may become prohibited from binding coverage should a “Tropical Disturbance” enter the Gulf of Mexico or Caribbean Sea.

In these cases we may be unable to bind new coverage quoted in open proposals until the storm leaves our area and our binding authority has been restored.

Please arrange your coverage protection early to avoid this type of delay. While we regret any inconvenience, the carriers impose these restrictions on all agencies.

The Differences Between Advisor Compensation

 

Most Americans worry about retirement. According to a survey conducted earlier this year by the Employee Benefit Research Institute, a mere 13 percent are “very confident” about their retirement future. Fortunately, working with an advisor is a great way to improve that view. Not only will he or she help you meet today’s financial goals, but also make investment decisions upon which you can build your retirement.

Of course, you have to find the right financial advisor first. When making that determination, it’s helpful to understand the pay structure of the professional in question—as this can influence his or her approach.

Full Commission Advisor

An advisor earning commissions alone makes his living selling financial products to investors. For each sale—or transaction—he makes, he receives a portion of the associated client fees. This can cause a conflict of interest wherein the professional may place a greater emphasis on generating transactions than on investment performance. Churning—or the excessive buy and sell of securities—could be a danger when working with a full commission advisor.

Commission and Fees Advisor

Often confusingly referred to as a fee-based advisor, a professional paid in this manner receives fees for certain services—such as reviewing your portfolio or creating a financial plan—and commissions on the products sold. This is currently the most common pay structure for financial advisors and carries the same risk of conflict of interest as found when working with a full commission advisor.

Salaried with Bonus Advisor

This pay structure is popular in discount brokerage firms and banks. The advisor receives a base salary—often determined by the value of the portfolios he or she manages—along with bonuses in exchange for selling particular products. This can create a conflict of interest in which the professional disregards investments more suitable to the client while encouraging the purchase of those that generate a bonus.

Fee Only Advisor

Fee only advisors do not represent any financial services company so no one is using a commission or bonus to incentivize them to sell you a particular product. This removes any financial stake they may have in your decisions, allowing them to recommend only products they believe to be in your best financial interest.

In general, a fee only advisor charges a flat and transparent fee structure based on a percentage of the assets he or she manages for you. When your assets increase—when your investments are performing well, for example—the fee you pay to the advisor also increases. This eliminates all conflict of interest because both parties benefit from the asset growth.