For the consumer, many financial advisers are compensated by commissions that are earned through the solutions or products they recommend. We believe that the fee-only financial planner is a preferred method of compensation for financial planners. Other methods may cause a conflict of interest for you, the client. This conflict could cause a commissioned product being force to fit a problem rather than a problem being solved by an objective and independent answer.
Fee-only compensation helps you understand what you are paying for.
We believe a fee-only compensation model helps our clients better understand what they are paying for. It eliminates the worry that the client may have on a recommended solution having any hidden charges or a force fit. This compensation model matches our financial disclosure and fiduciary responsibility to our clients. Other benefits of a fee only advisor or fiduciary are:
- A fiduciary must meet a higher standard in matching your financial needs with the proper recommendations. We must consider your best interest.
- A commissioned financial advisor or a registered representative only needs to meet a suitability standard test.
Congress is currently debating this issue for the financial service industry. Under the new rules of the SEC an adviser is either a fiduciary or not. If you do not use an advisor who is a fiduciary, you the client, take on additional risk. This risk is created since the adviser does not need to act in your best interest and you must understand the recommendation. You need to ask that questions and read the fine print of the disclosure statements.
Our independent advice allows us to be objective in the solutions we provide to our clients. We are not linked to a specific set of products. Along with the fee-only and fiduciary roles, we believe that this process provides the best model for all consumers and clients.