Purse Strings Approved Professional Blog Series
How Do Financial Professionals Get Paid: Making Sense of Diverse Compensation Models
Ladies, let’s be honest – figuring out how financial professionals earn their keep can be a real head-scratcher! 🌟💸 With realtors, mortgage brokers, financial advisors, and money coaches all marching to their own payment drum, it’s easy to get lost in the jumble. 🏠🔑💼💡
But fear not! By gaining a solid grasp of how they’re compensated, we empower ourselves to make shrewd choices when enlisting their services.
Let’s demystify the money game!
Realtors
Realtors are crucial in real estate deals. They make money through commissions, which are a percentage of the property’s sale price. Here’s how it works:
- Seller’s Agent: If a realtor works for the seller, they typically get 5-6% of the sale price as their commission.
- Buyer’s Agent: When they represent the buyer, they often get a part of the commission paid by the seller.
- Dual Agency: Sometimes, a realtor may represent both the buyer and seller. In this case, the commission may be different and subject to negotiation.
Michelle Schroeder
Licensed Real Estate Broker and REALTOR at Berkshire Hathaway HomeServices | Chicago
Michelle focus on achieving Real Estate Goals. As a REALTOR, she is an advocate and a fiduciary. Through education of the process and market she helps her clients make moves to invest in themselves. As an added bonus Michelle is very experienced with renovations!
Michelle has built her real estate career around helping clients create and achieve their real estate goals. Not sure where to start? Michelle provides both the savvy investor and the first-time home buyer with expertise tailored to their specific needs. Don’t know what questions to ask? She is here to guide you through the process. Market education is key, and she has power partners in all aspects of the transaction who will assist in our plan for your success.
Mortgage Brokers:
Mortgage brokers help people find the right home loans. They work as go-betweens for borrowers and lenders. Here’s how they get paid:
- Lender-Paid Model: Sometimes, the lender pays the broker a commission based on the loan amount and interest rate.
- Borrower-Paid Model: Or, borrowers can pay the broker directly. This can be a fee based on a percentage of the loan or a flat fee.”
Matthew Shanlian
Great Lakes Division President at Primary Residential Mortgage Inc.
Matthew has been working in the mortgage industry since 2007, beginning as a loan officer assistant. He has worked his way up to Division Manager with Primary Residential Mortgage, Inc., where his main role is to travel and educate referral partners on strategic equity management techniques.
Matthew believes homeownership is one of the key pillars to women’s progress and financial freedom. He wants to be a catalyst for change in that area and focus on building great relationships that help individuals grow financially and intellectually! Whether it is buying a first home, downsizing, or deciding what to do with the home in the event of a divorce, Matthew has experience working with clients in these situations.
Financial Advisors:
Financial advisors help with investments, retirement plans, and overall money matters. They earn their income in various ways:
- Commission-Based: Some advisors earn money by selling financial products like mutual funds or insurance. They get paid when you buy the products.
- Fee-Based: These advisors charge for their advice and can also earn commissions from selling certain products.
- Fee-Only: These advisors only charge for advice and don’t get commissions. They might have an hourly rate, a fixed fee, or charge based on how much money they manage for you (AUM).
AUM (Assets Under Management): If advisors manage your investments, they can charge an annual fee, often a percentage of what they’re managing. For example, it’s usually 1% for up to a million dollars, and it goes down as you invest more.
Lisa Carlson
Founder and Financial Advisor at Carlson Wealth Management LLC
Lisa’s mission is to get to know and understand clients’ needs, wants, and long-term goals. They want to help clients develop, implement, and monitor a strategy that’s designed to address individual situations.
They understand the challenges families face today.
From managing debt to saving for college to retirement, these personal finance challenges can be overwhelming. It is committed to utilizing all of its resources to help clients pursue their goals.
Money Coaches:
Money coaches help people get better with their money and reach their financial goals. They get paid in different ways:
- Hourly Rate: You pay by the hour for coaching and advice.
- Package-Based: Some offer bundles with multiple sessions or certain services for a set fee.
- Subscription-Based: Others provide ongoing help through subscriptions. You pay a monthly or yearly fee for access to resources, advice, and regular check-ins.
Pamela Richardson
Money Coach and Financial Educator at Money Mastery with Pam
Concerned about money? Money Mastery with Pam helps young adults, parents & small business owners develop a better relationship with their money. Pam offers hourly sessions or package based bundles for 3 or 6 months!
Knowing how financial pros get paid is vital for smart decisions and transparent money partnerships. Whether you’re dealing with a realtor, mortgage broker, financial advisor, or money coach, understanding their payment methods lets you assess their advice clearly and align your goals with theirs. Be open about asking how the professional gets paid. It’s the best way to build a trustworthy, win-win connection.
