Financial Advisor? Fee-based versus AUM?

[PharMed2016]

Hey guys, I had a meeting with a financial advisor yesterday who presumably got my number from the University. They were explaining to me their reimbursement structure which involves getting fees from whatever financial institution that I am associated with for the account that they help me open. The person goes on tell me its not fee-based or assets under management (AUM). From what it sounds like... the financial institution would charge me a certain amount in management fees and they would get a portion of that. I have a self directed Roth IRA which low cost ETFs and a 403b invested the same way... does that mean that they would get a fraction of the basis point cost for the ETF? I wasn't really following them since I have never heard of the reimbursement structure. Sounds more like assets under management.

Thanks everyone,
PharMed2016

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[cpants]

Smells like front-loaded mutual funds or something -- a rip off. If you want to use an advisor, look for someone who is fee based and get some recommendations.

 

[ThoracicGuy]

Smells like front-loaded mutual funds or something -- a rip off. If you want to use an advisor, look for someone who is fee based and get some recommendations.

Or, you know, do it yourself. The basic 3 or 4 fund portfolio will do most people very well.

 

[The PA Investor]

It sounds like you already have some kind of financial base to work off of. Stick to a 3 fund portfolio and you'll do well. Forget the financial advisor and just read some a few financial books. You'll get more out of that than this guy.