Fee Only advisors are (typically) very experienced financial advisers who have abandoned the traditional business model of delivering advice.
Commissions as compensation is the traditional method of delivering advice to consumers.
Fee Only advisers reject this business model, preferring to remain impartial and untied to products, be they mutual funds, insurance products, or other broker/dealer vended products.
The Fee Only Advisor:
- Has no broker/dealer
- Has no corporate parenting
- Can act as a legal Fiduciary
- Represents only the client
From the consumers point of view, this should be applauded. Gone is the a conflict of interest inherent when the advice you receive is tied to the products you may buy.
Dealing with a stockbroker, insurance agent, bank investment office, or even a Registered Representative that is also your CPA, makes “savvy” a necessary attribute.
Take a look at the new account form every brokerage customer must sign (this is new)…”any advice you may have received from your Registered Representative was incidental to the sale of products”
The Fee-Only adviser, on the other hand, will often hand you a Fiduciary Oath, a signed document pledging to act in your best interest at all times. A simple but all-encompassing promise to do the right thing.
Advice, in this case, is more than “incidental to product sales“! It’s essential to your well-being!