Fee-Only vs. Fee-Based
From the day we first opened our doors more than 30 years ago, we have always been a fee-only financial planning firm. Fee-only means we accept payments only from our clients. We accept no compensation from mutual fund companies, insurance carriers, or other service providers.
This structure is in contrast to the more common compensation structure in our industry, which relies either partially or entirely on commissions. Under this structure, advisory firms receive compensation for selling certain insurance contracts or recommending certain mutual funds or other investment vehicles.
Recently, some firms operating under this type of model have begun marketing themselves as fee-based, which is meant to indicate at least some of their compensation comes from clients, in addition to commissions. Those calling themselves fee-based thus hope to differentiate themselves from those who are entirely commission-based, but in either case, we believe a model based even partially on commissions cannot offer clients the assurances they need that they are receiving advice that is always in their best interest.
We feel strongly about this distinction and have advocated on behalf of fee-only advisors through our work with NAPFA, an organization made up entirely of fee-only advisors like us, who believe our job is to act with undivided loyalty to our clients and no one else.