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 Frequently Asked Questions
What is fee based financial planning? Is BCFP a home based business? What makes BCFP'S account statement so much better than the rest?
What is fee based financial planning? There are basically two ways financial products are sold, commission based and fee based. In a commission based transaction you are charged a commission to buy or sell an investment. In a fee based plan you are charged a percentage fee based on your assets under management. Fee based planners such as BCFP use no load mutual funds that do not carry any commissions or loads for their clients. For the purchase of individual stocks or bonds you will pay a very small commission which is a fraction of what a commission based product would be. Also, we feel that there are several advantages to fee based planning. 1) There is no need to worry if the product you're buying is in your best interest because fee based planners receive no commissions or kick backs from anyone which means fee based planners will find investments with no extra cost or very low cost to you. Remember, with commission based products the person who sold you the product receives a commission. Some products carry higher commissions than others. 2) In most cases, fee based advisors see themselves as financial planners because of the wide array of advice they give on all kinds of financial planning issues. Commission based advisors (stock brokers) usually limit themselves to investment advise.
The fees are paid to BCFP. You can elect to pay the fees out of your pocket or have the fees taken out of your account. This can even be done with an IRA. You will not be penalized because the fee is used to pay management fees and it is paid directly to BCFP. Most clients choose to have the fees deducted from their account.
Is BCFP a home based business? Yes and for good reasons. 1) It keeps overhead down which keeps fees lower. 2) It provides BCFP access at any time to the computer system which is a huge plus for working late in the evenings or early in the morning. 3) It allows clients to reach BCFP in the evenings or at odd hours. Once you see the high tech layout at BCFP, you'll be sold.
What makes BCFP'S account statement so much better than the rest? The information that it contains is truly on the cutting edge (click on the service link and then the quarterly statement link). Following are a few features of the statement. Internal rate of return shows you the rate of return for each investment and the portfolio as a whole. It also shows this figure annualized which means you can look back in time to see how your portfolio has performed on an annualized basis (a very important measure of return). The statement also breaks down the asset allocation percentages by conservative, moderate and aggressive. It further breaks the information down in categories like large cap growth, mid cap value and small cap blend, and places all of this information on a colored pie chart. This is a must for asset allocation. It also has a valuation vs. time chart. This line chart tracks the total value of the portfolio over time. BCFP will show you how to read your statement. It is very easy to understand once you know the basics and a guide is posted on the clients page of the web site.
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