The fee inside the "free" review

Today's issue covers one thing: what "free" actually costs when it comes to financial advice.

You have probably seen the invitations. A free retirement review. A free portfolio checkup. A free steak dinner with a talk about protecting your savings.

Here is the thing to hold onto: nobody works for free. The person offering the review gets paid somehow. Usually one of two ways. They earn a commission on the products they sell you at the end of the review. Or the review is the doorway to moving your accounts under their management, where they collect a percentage of your money every year.

Neither of those is automatically bad. Plenty of honest advisors earn a living both ways. The problem is when you don't know which one is happening, because hidden pay shapes advice. A review that ends with "you need this annuity" reads very differently once you know the reviewer earns a commission the day you sign.

Two questions sort this out fast:

1. "Are you a fiduciary, all the time, with all my accounts?" A fiduciary is required to put your interests first. Ask for the answer in writing. Anyone who dodges or says "it depends" has answered you.

2. "How do you get paid, in dollars?" Not percentages, not "it's built in." Dollars. If they sell you something, how much do they make? If they manage your money, what would you pay per year on your balance?

Honest professionals answer both questions without flinching. The ones who get uncomfortable have told you what the free review really costs.

Next Tuesday: the phone call that sounds exactly like someone you love, and the one thing to set up with your family before it comes.