When searching for high-quality investment advice, discerning shoppers know it is best to find an advisor whose pay is not based on commissions. However, does that mean you should look for a fee-based advisor or a fee-only advisor?
Financial advisors with a fee-based payment structure accept commissions. Their fee-based pay comes from you and also from commissions they receive for recommending financial products you buy.
The potential for kickbacks gives fee-based advisors an inherent conflict of interest. They can recommend products that pay them higher commissions regardless of whether or not those same products cost you more in fees.
Advisors who have a fee-only payment structure do not accept commissions. They may be paid by the hour, via a flat project fee or according to a percentage of assets under management (AUM). Because fee-only advisors are not compensated by a third-party, any conflict of interest is minimal. To find out if an advisor is truly fee-only, see if the individual is a member of the National Association of Personal Financial Advisors (NAPFA). NAPFA members are required to be fee-only, and they take a fiduciary oath to act in your best interest.
We provide services exclusively on a fee-only basis and adhere to a fiduciary standard. We don’t sell any financial products or receive any commissions whatsoever. Our fees are structured according to the time we spend helping you, and our recommendations are as unbiased as possible. We work directly for you and you only, acting in your best interests. Our goal is your success.