Over the years, I have encountered a great deal of confusion among the public surrounding Fee-Based vs. Fee-Only advisor compensation.
Fee-Only is pretty straightforward. The client pays the advisor for his/her advice. The fees can take one or more of several forms:
• A flat fee for the services rendered.
• A percentage of the client’s investment assets or in some cases another metric such as net worth.
• Hourly
Additionally the fee can be for one-time or ongoing services. In no case will a Fee-Only advisor receive any compensation from sales commissions, trailing commissions, or any other form of compensation derived from financial product providers.
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