COMMISIONS vs FEES.
Why FFH charges a fee for its services
Most professionals in the financial services industry earn their paycheck from commissions generated by the investment or insurance products they sell.
While there is nothing inherently wrong with commissions, they aren’t very transparent. How often have you heard the phrase “You don’t pay me, the company I put your money with pays me?”
Commissions can also create a “windfall” or “bounty hunter” mindset for financial professionals and impose a “buyer-beware” burden for clients.
We have found that most clients want to be advised, not sold.
That’s why Financial Freedom House charges a fee for its investment advisory and financial planning services.
Charging a fee for financial planning avoids the conflicts of interest that arise from the need to sell something to get paid. A fee-based “pay as you go” compensation model for portfolio management puts us on the same side of the table as our clients.
Because it takes us three to five years to earn in fees what we would earn with commissions on “day one”, we have a strong incentive to do a good job and provide ongoing value so that we keep clients happy and engaged for the long term.
No Revenue Sharing!
To avoid any actual or perceived conflicts of interest, neither Financial Freedom House nor its advisers accept any form of revenue sharing or indirect compensation from the investment products or service providers used in client accounts.
This prohibition on revenue sharing includes the 401(k) and 403(b) plans we serve.