Why are we "Fee Only"?

Fee Only

A fee-only financial planner is a professional who charges a flat fee or an hourly rate for their services, regardless of the products or investments they recommend. This means that they have no conflicts of interest or hidden incentives to sell you anything that is not in your best interest.

 

Other types of financial advisors, such as commission-based or fee-based, may receive commissions or kickbacks from the companies whose products or investments they sell. This creates a potential bias and a fiduciary breach, as they may not act in your best interest, but in their own.

 

A fee-only financial planner, on the other hand, acts as a fiduciary, which means that they are legally and ethically obligated to put your interests first. They provide unbiased and objective advice that is tailored to your specific goals and needs. They also disclose all their fees upfront, so you know exactly what you are paying for and what you can expect from them.

 

"Of the roughly 285,000 professionals in the U.S. who offer clients financial advice, fewer than 2% are fee-only advisors who follow a true fiduciary standard that prohibits commissions on products recommended to clients and legally requires the advisers to always put their clients’ interests first."

- Excerpt from this Wall Street Journal article.

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Advice Only

But we go even further than that, we are an “advice-only” firm as well.

 

This means that we never charge a fee based on how much you have invested with us.

 

An advice-only approach means that you pay a flat fee for the financial advice you receive, regardless of the size of your portfolio or the transactions you make.

 

On the other hand, paying for assets under management (AUM) means that you pay a percentage of your portfolio value to the advisor every year, typically 1% or more. This creates a conflict of interest, as the advisor may benefit from increasing your portfolio size, even if it means taking more risk or paying higher fees. Paying for AUM can be very expensive over time, as you pay more as your portfolio grows, and you pay even when your portfolio declines.

 

Read more about the issues with charging AUM fees

 

Read how a 1% fee can cost you $100,000

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Additionally advisor that work on AUM have an incentive to advise that you put your money only in the accounts that they can charge fees on. That is often not in the best interest of the client. 

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An advice-only approach can save you money and give you peace of mind that you are receiving unbiased and personalized financial advice. We can help you with all aspects of your financial life, such as budgeting, saving, investing, retirement planning, tax planning, estate planning, and more.

 

Here is what Forbes has to say: Fee-Only Financial Planner: What's the Difference? (forbes.com)