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Fee-Only Advice

Follow the money
What is a 'Fee-Only' advisor, and why should you work with one?

It seems like everyone calling themselves a financial advisor these days claims the same thing - that they provide independent, objective advice. How can you tell the difference between objective advice and a sales pitch?

First, find an advisor with the expertise, experience, integrity and personal compatibility you deserve.

Second, follow the money. Ask the number one question: How do you get paid?

1) Commission-Based Advisor

Often referred to as “free advice”, in the commission-based advisory framework you get a narrow type of advice that product providers pay for you to hear. Insurance and investment companies pay out the highest commissions for their most expensive products, to encourage their sale. Financial advisors working for commissions have strong financial incentives to recommend high cost products, and to present them as favorably as possible. Commission-based sales work well in some industries, but we don't believe financial advice is one of them.

2) "Fee-Based" Advisor

With stories of abuse increasingly common, some investors began seeing commissions as ‘bad’ and fees as ‘good’. In response, a number of big firms began charging fees along with commissions, and called it ‘fee-based’ advice. Sounding similar to ‘Fee-Only’ but with a big difference, Wall Street did what it could to shift the focus of what matters – commissions and the conflict of interest they create. 

3) "Fee-Only" Advisor

‘Fee-only’ refers to the method of compensation in which planners are paid fees directly by their client, and do not accept any other commissions or compensation from any other source. In this advisory framework, the recommendations you receive are not influenced by incentives paid to the advisor to steer you toward particular products or companies. Take commissions and kickbacks out of the equation and the full, unbiased spectrum of financial solutions becomes available to you.