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5. Are there biases for professional financial planners when they are commission based or fee based?...

5. Are there biases for professional financial planners when they are commission based or fee based? Please differentiate

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Answer #1

Fees based advisor act more like a neutral party and provide the advice which is less biased towards any particular investment. For a fess based advisor there is no incentive to convince you to invest money in any particular fashion For example- he will not force you to buy an exuberant amount of life insurance if you truly don't need it.

A commission based advisor (on other hand) will like you to invest money in investment schemes that gives highest commission to him for investment.

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