Type of Financial Planner

	There are many types of financial planners. They can be broadly divided into three categories.
	Fee-only planner
	Fee only planners provide advice to their clients for a set fee.
	They are not reimbursed by companies whose products they recommend as they would not be holding agency of manufactures of respective products. There are no commissions.
	The big advantage of using a fee-only planner is that you receive un-biased financial advice.
	The fee-only model of compensation reduces the potential for conflicts of interest between the advisor and the client in that the advisor is not beholden to insurance companies, particular investments, and other financial companies.
	A fee only advisor may reduce conflicts of interest* such as:
	An incentive to generate commissions through the unnecessary buying/or selling of stocks, insurance products, other products (also know as churning).
	An incentive to convert non-cash assets such as real estate and collectibles to cash and securities so that the advisor can generate a commission.
	Commission-only planner
	This type of planner provides financial advice, but also tries to sell products to their clients that generate commissions.
	Type of products includes mutual funds, term or while life insurance, ULIP, Pension plans, and other investments.
	The big disadvantage of commission-based planner is the conflict-of-interest* that results from their recommendations - for products that generate handsome commission for them, not you.
	Commission-only planners usually work for insurance companies, brokerage houses, or banks.
	Except for the financial advice they offer, they are not that much different from a regular salesperson.
	Fee and commission planner
	These planners earn from both the client as well as the investment companies in the form of fees and commission respectively.
	On the fee side they charge certain amount of fee from the client for the services like creating a financial plan or engage in more limited planning activities, such as helping you to pick mutual funds or set up and automatic investment account for a childs college tuition.
	On the commission side, they get commissions for products which they sell to their clients from the companies / institutions.
	These type of planners are ideally suited for small investors who can not afford high fees.