Which of the following statement(s) is (are) correct?
A)Fee-only planners sell financial products, such as stocks or insurance.
B)Commission-only financial planners/brokers live solely on the commissions they receive on the financial products (such as investments or insurance) they sell to their clients.
C)Fee-only financial planners may benefit from steering a client to a specific financial product.
D)From the point of view of the client there is no difference between a fee-only planner and a commission-only planner.

Question

Quizplus · Accepted Answer

Commission-only financial planners/brokers live solely on the commissions they receive on the financial products (such as investments or insurance) they sell to their clients. Fee-only planners, on the other hand, do not sell any financial products and are compensated solely through fees paid by their clients. Options A and C are incorrect as fee-only planners do not sell financial products, and are not incentivized to steer clients towards any particular product. Option D is also incorrect as the compensation model for fee-only and commission-only planners is fundamentally different, and clients should be aware of the potential conflicts of interest associated with each compensation model.

Which of the Following Statement(s) Is (Are) Correct