Different Financial Assistance Options

Physician's Money Digest, October 2006, Volume 13, Issue 10

Wall

Street Journal

Journal

If you're a physician-investor trying todecide whether or not to hire a full-servicebroker or an independent advisor—orsomeone in between—it is important totake the time to find the right person to fityour needs. A recent article in the advises that you shouldresearch the strengths and weaknesses offinancial advisors, stockbrokers, and financialplanners, and the gives anoverview of each:

•Stockbroker. Stockbrokers trade securitiesand receive commission or feesbased on the product sold if they are brokerage-based—they may also chargeannual fees. If they are independent, theymay have a broader selection of investmentoptions and fewer reasons to pushparticular products.

•Financial advisor. Financial advisorsmanage the big picture for financial planningand asset management, and they havean obligation to their clients to be reliableand trustworthy. They take responsibility inmanaging your financial life, and you generallypay an annual fee of 1% to 2% of theassets under management. If they are brokerage-based, like stockbrokers, they maytry to push in-house products.

•Financial planner. Offering servicessimilar to financial advisors, financialplanners create a financial plan, but youwill execute it yourself through a traditional or online brokerage firm. The cost istypically a one-time fee.