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What to Know About Fee-Only Financial Advising

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Article originally appeared on Business Insider by Katie Oelker.

Summary

  • Fee-only advisors give financial planning advice to individuals and couples for a set fee based on the services they provide you.
  • Fee-only advisors do not receive commissions from the sales of products.
  • Fee-only and fee-based advisors have several differences to consider when deciding which type of advisor to work with.

Seeking a professional to help you manage your money is a great step to achieving your financial goals. But not all financial advisors are the same; some may offer varying services — and more importantly, they may have different fee structures.

A fee-only financial advisor will be one you’ll come across during your search. Here’s what to know.

What is a fee-only financial advisor?

A fee-only financial advisor is an advisor that’s paid on a set rate based on the services they provide a client, rather than being paid based on commission. These types of advisors act as a fiduciary , meaning that they’re required to make recommendations that are in a client’s best interest. While that seems like common sense, a lot of other advisors only act on a suitability basis, meaning that they only have to provide recommendations that are suitable for a client’s situation.

Read the full article on Business Insider.

Dan Moisand

 

Dan Moisand is a nationally recognized fiduciary fee-only financial planner, an Institute Real Fiduciary™ Advisor and Chair-elect of the CFP Board.

The Institute has enshrined the ‘Moisand Rule’ on fiduciary practices. It is basic and is more important today than ever: “You have to avoid conflicts. If I avoid a conflict, I don’t worry about it.”

Watch the video of Moisand speaking here.

Bob Veres

 

Bob Veres is a long term observer of financial planning. His Newsletter, “Inside information” Is a staple of leading planners. In the May edition he writes about fiduciary and the Institute.

"But a much bigger point is that the fiduciary standard—as Knut Rostad of the Institute for the Fiduciary Standard has pointed out—has been determined by the Supreme Court (1963 ruling) to be at the very heart of the Investment Advisers Act of 1940. It is the foundation of what it means to be an RIA registered with the SEC instead of a tipster or a tout."

- Bob Veres, Parting Thoughts ... The SEC's Own Compliance Culture