If you’ve looked into wealth advisors, you’ve likely seen the term “fee-only.” This designation refers to registered investment advisors and is one of the most important phrases to know when choosing a wealth professional.
But what exactly does it mean, and why should it matter to you?
In this post, I’ll explain what it means to be a fee-only wealth advisor and why we at Anderson Financial Strategies take pride in this distinction.
What Does Fee-Only Mean?
Fee-only wealth advisors are paid directly by their clients. They don’t receive kickbacks or commissions for recommending certain securities or investments.
The National Association of Personal Financial Advisors (NAPFA) believes fee-only wealth advisors are the most transparent and unbiased advisors you can come by.
Fee-only advisors are typically either registered investment advisors (RIA) or CERTIFIED FINANCIAL PLANNER® professionals. This is because both types of professionals require a fiduciary duty, which means they are obligated to put their clients’ best interests first.
How Are Fee-Only Advisors Paid?
There are a few different ways fee-only advisors get paid. Some popular methods include:
- Hourly: You pay a fixed amount based on the number of hours your advisor spends meeting with you.
- Flat fee: This is similar to the hourly method, but you pay one flat fee no matter how many hours you spend meeting with your advisor.
- Percentage of assets under management (AUM): You pay a percentage-based fee depending on the value of your investments. This fee is typically around 1%.
What Are the Benefits of a Fee-Only Advisor?
If you’re in the market for a wealth advisor, here are three key reasons why you should choose a fee-only advisor:
1. No Commissions
No matter how pure an advisor’s intentions are, it can be hard to provide unbiased recommendations when they know they’ll get a kickback or commission. But this isn’t the case for fee-only advisors. They have no incentive to push certain products because they don’t sell any products at all. They’re solely compensated by you.
2. They’re Fiduciaries
Fee-only advisors are fiduciaries, which means they’re legally and ethically required to always act in your best interest. They’re loyal, quick to disclose any conflicts of interest, and only give advice based on your unique situation and goals.
3. You Get Objective Advice
It’s easy to act on emotion when you’re dealing with your own money. There’s talk of a stock market crash, so you want to change your investing strategy. A family member needs to borrow money, even though you know giving it to them would jeopardize your financial security. You want to live a comfortable life in retirement, but you’re not sure if you’re on track.
In situations like these, it’s nice to have someone you can go to for objective advice.
Why Anderson Financial Strategies Is a Trusted Fee-Only Wealth Advisor
What makes Anderson Financial Strategies unique? Our clients lead unique lives and need a specialized touch from a firm that understands the opportunities and challenges they face. We set ourselves apart from the rest by honoring our fiduciary duty above all else. Our team practices full disclosure, due diligence, and regular communication—all through an honest relationship that prioritizes your needs.
In everything we do, our goal is to give you relationship-based, premium financial expertise with rapidly responsive service. We want you to feel excited and confident about your future, and we’d love to help make that a reality for you.
Ready to get started? If you would like to explore our services for your family or business, call us at 855-237-4545 to schedule an executive briefing to discuss your goals.
About Shon
Shon Anderson is president and chief wealth strategist at Anderson Financial Strategies, LLC with over 20 years of experience. As a fiduciary, Shon’s mission is to provide his clients with quality financial expertise along with rapidly responsive service through an honest relationship. He specializes in providing family office-style services to help his clients organize and focus their financial life. Shon graduated from Wright State University with a bachelor’s degree in financial services and an MBA in finance. He is a CERTIFIED FINANCIAL PLANNER® practitioner and holds the Chartered Financial Analyst® (CFA®) certification. His insights have been quoted in leading financial news publications such as CNBC, Yahoo Finance, Fox Business, Consumer Reports, Forbes, Bankrate.com, Investment News, and Kiplinger. Shon serves as president of the CFA Society Dayton as well as on the boards of the Miami Valley Hospital Foundation and Wright State’s planned giving council and was appointed as a Trustee for Central State University. Shon and his wife, Jessica, reside in Sugarcreek Township, Ohio, and are blessed with triplet daughters, Elizabeth, Bridgette, and Alexandra, along with their son, Jacob, and dogs, Biscuit and Ella. To learn more about Shon, connect with him on LinkedIn.