Clients pay me to develop education savings plans either by the hour, by a flat fee for a plan, or by product commission. I get referrals from planners whose clients pay me a fee, but who complete the plan implementation themselves. I prefer a flat fee, but not everyone agrees. Do you think my advice is materially differant in any of these cases?
They need to save the same amount- they need quality money managers that match their risk/time profile- they need the same allocation to UTMA/CESA/529- they must heed the same tax/financial aid concerns. Where's the difference?
If they pay by the hour, an unscrupulous advisor may pad his time sheet (a skill mastered by the legal profession).
If they pay a flat fee it is incumbant on the advisor to complete the plan in as little time as possible to move on to other projects. They also must pay again if they want ongoing advice on their plan's progress.
If they pay by commission, the advisor must ensure that his plan makes sense to the client, and he only gets paid if they take action to accomplish their goal. In the other cases, the advisor is paid whether the client improves their situation through plan implementation or not.
Everyone is entitled to their preferred method of paying for advice, but the marketplace clearly indicates that not everyone agrees on that method. No method is free from conflicts.