Closely related to the fiduciary standard of care offered by Registered Investment Advisor firms, there is the matter of compensation: Who is paying the bills? In a commission-based model, traditional brokers and similar financial intermediaries are paid by the companies whose products they buy and sell. How might that affect their loyalties?
We feel the fee-only investment advisor model — in which the advisor’s sole source of revenue is his or her clients’ fees for services rendered to them — is best suited for minimizing conflicts of interest. As fee-only advisors, we receive no commissions or any other forms of compensation from outside sources. Instead, you pay a clearly disclosed fee in exchange for our clearly defined, objective advice and planning services.