Have you ever wondered how a financial advisor gets paid? There are two main methods: fees for services and built-in commissions.

  1. Fees for Service

In the fees for service method, an advisor might charge a fee by the hour.

  1. Built-In Commission

A built-in commission means that the provider pays the advisor a percentage or flat rate of the product they sell to you.

Our advisors receive payment from built-in commissions. This means the advisor only receives payment if you purchase a product.

Some may ask, “Doesn’t that put pressure on the client to purchase a product?” While this may be true at a car dealership, it is a little different here.

The important thing to note is if your advisor does not sell you the right product, and you cancel it within the first two years, the carrier takes the money back from them. While the commission may motivate an advisor to sell you a product, it also encourages them to sell a product that is suitable to your needs.

Each insurance company and product we sell represents a different fee and or commission. We use a disclosure statement to help clients understand the fees and the companies we use.

The typical types of investment fees:

Deferred Sales Charge (DSC) – Charged a gradually decreasing percentage at the time of sale.

Low Load (LL) – Charged a lower percentage at the time of purchase and sale.

Front-End Sales Charge (FSC) – Charged a percentage at the time of purchase.

No-load (NL) – Charged nothing.

How taxation on RRSP withdrawals works:

Up to in the year $1.00 – $5,000 the withholding tax is 10%

Up to in the year $5,001 – $15,000 the withholding tax is 20%

Up to in the year $15,001 – upward the withholding tax is 30%

Simplified Financial is special because the advisors strive to go the extra mile and fight for their clients. Their dedication to integrity and compassion can be rare in this industry. We are here to simplify! Give us a call.

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