Financial Toolset
Investment

Fee-Only Advisor

Financial advisor paid only by client fees, not commissions. Fiduciary duty to act in your best interest. No conflicts from product sales.

Also known as: fee only, fee-based advisor

What You Need to Know

Fee-only advisors are compensated solely by client payments—hourly fees, flat fees, or percentage of AUM. They don't earn commissions from selling financial products, eliminating major conflicts of interest.

This differs from fee-based advisors (can earn commissions AND fees) and commission-based advisors (paid by product sales). Fee-only advisors have legal fiduciary duty to prioritize your interests over their compensation.

Payment structures:

  • Hourly: $200-500/hour for specific questions
  • Flat annual: $2,000-10,000 for comprehensive planning
  • AUM: 0.5-1.5% of assets under management
  • Project-based: $1,000-5,000 for retirement plan, etc.

Find fee-only advisors at NAPFA.org or search CFP Board for "fee-only" + fiduciary standard. Avoid "free" financial advice—advisor is paid via product commissions, which creates incentive to sell you high-fee investments.

Sources & References

This information is sourced from authoritative government and academic institutions:

  • sec.gov

    https://www.sec.gov/reportspubs/investor-publications/investorpubsinvadviserhtm.html

Related Calculators & Tools

Put your knowledge into action with these interactive tools:

Financial Advisor Fee Calculator

Compare the long-term cost of financial advisor fees vs DIY investing and see if professional management is worth it

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Related Terms in Investment

12b-1 Fee

Hidden mutual fund fee (0.25-1% annually) for marketing and distribution. Comes out of your returns. Avoid funds with high 12b-1 fees.

AUM (Assets Under Management)

Total market value of investments managed by an advisor or fund. Used to calculate 1% annual advisor fees—$500K AUM = $5K/year.

Alpha

Excess return above benchmark. Positive alpha = beat the market. Most actively managed funds have negative alpha after fees.

Bear Market

20%+ sustained market decline from recent peak. Characterized by fear, pessimism, and falling prices. Buying opportunity for long-term investors.

Beta

Volatility compared to market. Beta of 1.0 = moves with market. Beta of 1.5 = 50% more volatile. Measures risk, not return.

Bull Market

20%+ sustained market rise from recent low. Characterized by optimism, economic growth, and rising prices. Opposite of bear market.

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