Financial Life Planning
Northeastern Financial Consultants Inc.is a fee-only financial planning firm committed to assisting client to reach their financial goals. Fee-only planners, like us, are compensated solely by fees paid by their clients and do not accept commissions or compensation from any other source. As fee-only planners, we believe there is a significant conflict of interest if an advisor stands to gain financially from the purchase of any investment or insurance product he or she recommends to the client.
Rather than paying sales commissions for brokers to sell you products you pay instead a reasonable annual fee, based on your account value. The fee-only advisor does not charge commissions. He/she is interested in growing your account and providing long-term service.
Why is it better?
The main difference between a Stockbroker and us is that they make a living by charging their clients commissions. Therefore the more the charge the more money they make.
Stockbrokers often charge 1% - 2% per trade on stocks, and as much as 6% on mutual funds. Stockbrokers may also have hidden charges such as 12b-1 fees or surrender fees on mutual funds, surrender fees and bloated internal expenses on annuities, and heavy markups on products like unit trusts or bonds.
On the other hand, as a fee-only advisor, our compensation is a flat percentage of your account value. We do not earn any money from commissions, trailers, or markups. We earn money only if your account grows or if we gain new clients.
Fee-only vs. Fee-based
Fee-based usually means that you pay for a plan or other advice and then pay to buy investments with commissions or markups that go to the advisor. This can be worse than the straight commission arrangement because you may pay twice without realizing it.
Fee-only is what leading financial writers often recommend. It is safer, more objective, and without the drag of commissions it has every reason to have performance as good or better than the fee-based or commission approaches.
Standard Payments for Services
Specific advisory services such as evaluating your overall financial needs, developing a comprehensive financial plan or developing an asset allocation plan are billed on a flat fee basis. Fee-only advisors charge a set fee for services rendered and a fee, usually 1% or less, based on a percentage of the assets under management. A commissioned advisor gets paid on a per transaction basis by the companies whose products he or she sells.
For ongoing management, the type of payment arrangement you have is important because of the issue of sales pressure. If an investment advisor is compensated solely by commissions or is affiliated with a firm that offers only it’s own proprietary investments, you’ll want to know the implications of this arrangement and get assurances that this will not influence decisions made for your account.
Financial Life Planning
The Financial Life Planning Institute is dedicated to educating, training, and developing tools for financial advisors using this unique discovery process.
Financial Life Planning means not just asking the right questions but being able to engage clients in meaningful conversations about their important life events, situations, and goals. These introspective conversations, known as financial life dialogues, are central to the development of the Institute’s planning tools and training programs. Financial advisors who move from being transaction-based financial planners to Financial Life Planners develop clients for life, by helping those clients achieve the freedom to pursue their own goals, at their own pace, on their own terms.
Financial life dialogues are centered around important life events, transitions, principles, and goals that have an impact on a client’s financial situation. These dialogues result in a strong foundation and long-lasting relationship between client and advisor. The Financial Life Planning Institute provides advisors with all the tools they need to develop stronger client relationships through:
By focusing clients on the four key components of their lives—history, transitions, principles, goals—advisors are able to move successfully from financial planning to financial life planning, and create clients for life.