Rarely do you see a newspaper reporter from a local publication cover a topic as in depth as Emma Sapong, of the Buffalo News, did with money scripts.  Not only did she talk with the leading experts on the subject, she also interviewed a number of people regarding their money scripts.

One item that stood out and got my attention was a quote by Amy Jo Lauber, a financial planner and president of Lauber Financial Planning in West Seneca, New York, who is also the secretary of the Financial Planning Association of Western New York.  Sapong quoted her as saying, “Planners get paid through selling products, not by the hour, so the traditional business model isn’t conducive for sit-downs to explore a client’s money history and gauge its influence on their current financial tendencies.”

Financial planners are not paid by selling products!  That is the ubiquitous view of financial planners and it is simply wrong.  The FPA lists 17% of their members (about 4,000 planners) as fee-only.  Their clients compensate them by fee-for-service (by the hour, retainer, or as a percentage of net worth or assets under management).  The 1,500 members of the National Association of Personal Financial Planners are also only compensated by fee-for-service and don’t allow a member to accept a commission for the sale of any product.

I would suggest that a “financial planner” who is totally compensated by commissions is not practicing financial planning, and in that regard I would agree with Lauber that the commission-only business model isn’t conducive to exploring a client’s money history.

So, bottom line, there are financial planners who don’t sell product and are your advocate, just like an attorney, an accountant, or a physician.  The best place to find one is at NAPFA.org.

You can read the whole article here.

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