How a Fee-Only Advisor Works For those that seek financial advice, the most important decision to make is the individual or organization with whom they choose to work. A Fee-Only advisor understands the significant degree of expertise, trust and confidence that it takes to earn a client's on-going respect. It is important to understand the difference between a 'Fee-Only' model and a 'Fee-Based' model. Although they sound similar, there can potentially be a big difference. In a 'Fee-Only' model, the only compensation an advisor receives comes directly from the client. In a 'Fee-Based' model, the advisor can receive compensation directly from the product provider in addition to the fee paid by the client. An example of the 'Fee-Based' model would be the advisor charging a fee to the client and also receiving compensation from the mutual fund company. A 'Fee-Only' advisor does not have the financial incentive to use a specific mutual fund family. No Commissions Rather than charge commissions on trades or loads on mutual funds, a Fee-Only advisor charges a fee based on the value of the assets or on a pre-determined hourly rate. This method of doing business is by far the most transparent for the client and most readily understood. Our first priority is helping you take care of yourself and your family. We want to learn more about your personal situation, identify your dreams and goals, and understand your tolerance for risk. Long-term relationships that encourage open and honest communication have been the cornerstone of our success. Issue Oriented Instead of trying to sell the next best thing, a Fee-Only advisor can focus on the financial issues that are most important to the client. In some cases, investments are a minor issue in the eyes of a client. There is often an immediate issue that needs to be addressed. Examples of immediate issues may be a pending retirement, a divorce situation or an estate settlement. Also, a comfort level can be found by seeking a second opinion on a financial strategy, such as how to invest an existing retirement account. In these cases, it may be more appropriate to consult with a Fee-Only advisor on an hourly basis. Investing Requires a Steady Approach If there is one thing the last few years have shown, it is the markets are unpredictable in the short term. Competent Fee-Only advisors are committed to helping you meet your investment goals through sound advice and diligent oversight of your investment portfolio. Often times, bad financial decisions are made when they are driven purely by emotions. Fiduciary Responsibilities Fee-Only advisors embrace their role as a fiduciary. A responsibility that requires they must always act with the client's best interest in mind. This is an important distinction from your typical financial advisor or broker. It is a distinction that matters! Conflicts of Interest Unlike a broker, Fee-Only advisors are not pushing products. They are Registered Investment Advisors (RIA) and only sell you their advice. There are no hidden agendas because as an RIA they are required by law to fully disclose all conflicts of interest they may have in serving a client. Clients also avoid conflicts that arise when a broker receives a greater compensation by selling one product rather than another. Fee-Only advisors do not receive compensation from third-party product producers. Independence Matters Independent Fee-Only advisory firms are not pressured by a parent company to direct clients into proprietary products. Fee-Only advisors find the necessary tools that are appropriate for each client's individual needs and risk tolerance.