MARMAC

When you go to interview financial advisers, you are considering whether you want to hire each one: You are the boss, regardless of how much they know about money. You are the boss of your money, and when you hire someone to take care of it—just as when you hire a qualified gardener to look after your garden or a qualified child care worker to take care of your child—you are the boss of that person as well.
I set up my own, somewhat unusual, fee schedule with this in mind. When someone—rich, poor, doesn’t matter—calls my office for an appointment, that prospective client is first sent a letter stating what they are expected to bring along to the appointment and explaining my fee structure. About a week later my secretary almost always gets a call from them saying that the only thing they have a hard time with is how much I charge. My fee structure dictates that clients must pay me what they think my services are worth to them. At the end of our session, which runs on average two hours, they decide what my services are worth. My clients are the boss.
Apart from my way, there are a few ways that advisers charge for their services.
FREE CONSULTATION
An adviser who sees you for free is trying to convince you to hand over your money to him to invest for you—and reap rhc commissions for himself. Since mutual funds, if purchased through an adviser, carry heavy commissions, around 5 percent, most likely mutual funds will make up a hefty part of your portfolio if you go with this adviser. So if you go in to see an adviser for free, so to speak, and hand over $20,000 for him to invest in those loaded funds, then you will have paid $1,000 for that “free” session. The second that you Sit down in that officc and tell the adviser how much money you have to invest, he knows what it means for him. If you come in with $100,000 he’ll get about $5,000. Not bad for an hour or two of work.
FEE-BASED
This is where you simply pay the adviser an hourly fee to tell you what to do with your money. She does not do it for you.
FEES PLUS COMMISSIONS
You pay the adviser a fee to tell you what to do, to create a plan with your money. If you decide you’d like him to implement it for you, he’ll also get a commission.