Financial Advisory Fees

Product Sales Commission vs. Fee Based Advice

There is an ongoing debate about the way a financial planner should be remunerated. Previously a financial plan sold a client an investment and/or risk product with a biased view towards the product that yields the highest commission.

With such a biased offering, investors were often mislead with many not seeing any return on their money or even worse losing large sums of money, with some losing their entire life savings.

An alternative to commission based financial planning is fee based advice, where an investor remunerates the financial planner for their services. Normally a financial planner would ask for an upfront fee, however if a client bought a product from them, then this fee would be waived. This option is seen as being more independent as a financial planner earns a similar amount of remuneration, regardless of the product(s) selected by a client.

3 x 2 has gone a step further. 3 x 2 offers an investor two types of fee based advice - the first option is a fee based advisory service whereby a client pays a monthly retainer for our services and any commission earned on a product is deducted from the monthly retainer.

The second option is for an investor who has a large sum of money to invest. Instead of deducting any commission received from the retainer; 3 x 2 charges a fixed fee and ensures that no commission is deducted from the investment.

With these two options 3 x 2 is an independent financial advisory offering the private investor unbiased advice.