Understanding How Financial Advisors Are Paid: Fee-Only vs. Commission vs. Fee-Based

November 4, 2024 By: Jackie Goldstick, CFP®

Fee-Only vs. Commission-Based Advisors: Why it Matters
How your financial advisor is paid can tell you a lot about whether their financial interests are well-aligned with yours. To help you make an informed choice, here’s a quick comparison of the three ways in which advisors may be paid: fee-only, commission-based, and fee-based.

Fee-Only Advisors
Fee-only advisors are compensated solely through client fees (either hourly, flat rate, or as a percentage of assets) and do not have incentives tied to product sales. This helps to increase the likelihood that the advice they offer is unbiased and impartial.

Commission-Based Advisors
Commission-based advisors earn income through commissions on products they sell, such as insurance or investments. Their advice must meet a suitability standard, meaning that product recommendations must be reasonable, but they do not necessarily have to be what is in the client’s best interest.

Fee-Based Advisors
Fee-based advisors charge fees while also earning commissions on products, blending fee-only and commission-based models. The terms “fee-based” and “fee-only” are often used interchangeably, but in fact, they can be quite different.

Is a Fee-Only Advisor Right for You?
Choosing to work with a fee-only advisor provides peace of mind that your financial interests are top priority. Here’s how a fee-only model benefits you:

Unbiased Advice : Fee-only advisors offer guidance without incentives tied to product sales, helping to ensure recommendations are tailored to your goals.
Fiduciary Focus : Fee-only advisors are more likely to operate under a fiduciary standard, putting your interests first.
Long-Term Support : With a focus on relationship-building as compared to transactions, fee-only advisors provide ongoing support and design flexible plans that can be modified as your financial needs change.

Why Choose Core Wealth Management?
Core Wealth Management is a fee-only wealth management firm with a strong commitment to putting clients’ interests first. Based in Jupiter, FL, our team of Certified Financial Planner ® (CFP ® ) professionals brings a wealth of expertise in investment management, financial planning, and advisory services—all while strictly upholding the highest fiduciary standards. Our well-qualified advisors are dedicated to building lasting relationships and providing personalized support and guidance as your financial needs and goals evolve.

Core Wealth Management is a fee-only wealth management firm located in Jupiter, FL. Our CFP® professionals provide investment management, financial planning and advisory services, while always strictly abiding by the highest fiduciary standards. For more information, contact us today at 561-491-0231.

Jackie Goldstick, CFP® is the Principal and Director of Financial Planning at Core Wealth Management. She is a member of the National Association of Personal Financial Advisors (NAPFA).

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