The Fee-Only Difference

How is a “Fee-Only” Financial Advisor different?

Have you ever asked yourself “How do I know if my advisor is acting in MY best interest?”  Fee-Only financial advice gives you the confidence to be certain.

There are three main ways a financial advisor can be compensated: Fee-Only, Commission, and Fee-Based.  The differences can be hard to understand.  We hope the following information will help clarify how important it is to know these differences so you can be confident that YOUR interests are coming first.  

FEE-ONLY

  • The advisor is a Fiduciary and is required by law to act in client’s best interest
  • The advisor works for the client, not a broker/dealer or insurance agency
  • The advisor is completely independent
  • Fees are clearly and fully disclosed
  • Potential conflicts of interest are disclosed

 

COMMISSION

  • Recommendations based on suitability, not best interest
  • Compensation tied to product purchase
  • Advice often limited to product recommendations
  • Full and clear fee disclosure not required
  • Conflicts of interest disclosure not required
  • Little incentive to service the client after product sale

FEE-BASED

  • Usually a combination of fees and commissions
  • Not the same as “fee-only” since advisor can earn commissions from product sales
  • Harder to determine if the advisor is acting in a fiduciary or sales role

We recommend you work with an Independent, Fee-Only financial advisor in order to be confident your interests are put first.  Schedule a Get Acquainted Session to find out which TorchLight Advisors service is best for you.