Why is Fee-Only an important consideration when choosing a financial advisor?
Fee-only means I am compensated only from fees paid by clients. I am always able to work in clients’ best interests and exclusively for them, with no sales-pressure-tactics or hidden agendas. Non-fee-only financial advisors, agents, and brokers are mostly, if not completely, compensated through commissions from the products they sell. Many times these commissions are not fully disclosed to the client and often, the product can be completely inappropriate. Just as alarming, when an advisor is compensated this way, they are most likely required to work in their firm’s best interest, not yours. Other firms work in a “fee-based” capacity for their client, charging a fee part of the time and commission at other times. I feel “Fee-based” is a misleading representation because it is often times an attempt to get the client into thinking they are “fee-only”, but in reality, commissions or other non-disclosed compensation may make up the large majority of their revenue. With all these possible
