In the wake of the Bernie Madoff scandals and other high profile Ponzi schemes many investors are asking themselves if it is possible to find a financial advisor they can truly trust. The good news is that there are plenty of honest financial planners out there. The bad news is that it can take quite a bit of time and effort to track them down. But with a little bit of knowledge and some good planning investors can find the professionals they need to help them achieve the goal of financial independence.

One of the most critical parts of your financial education should be learning to tell the difference between commission based, fee based and fee only financial planners. This difference may not seem that important, but as you continue your financial education you will come to see just how critical it really is.

Commission Based Financial Planners
The vast majority of men and women working as financial planners and financial consultants today are commission based individuals. That means that they receive a commission each time they sell a particular mutual fund, stock, annuity or other investment vehicle. These financial planners do not charge clients for their services – instead they make their money off of the products they sell.

While investors may feel that they are getting a good deal with this type of financial advisor – after all there are no fees – in the end it is hard to determine whether the advice given is really in their best interest and not the best interests of the planner. Even if there is no overt attempt to deceive there can still be a subtle pressure for the planner to steer clients into investments that will generate fat commissions.