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Fee-Only vs. Fee-Based Advisor: What's the Difference?

By Todd Berg, ChFC®

June 6, 2024

Ever found yourself scratching your head over the "fee-only" and "fee-based" financial advisor labels? Yeah, they're tossed around like they're the same thing, but spoiler alert: they're VERY different.

  • Fee-Only Advisors: Someone who only charges for their services through fees paid directly by the client. No hidden agendas, no sneaky commissions from selling financial products like insurance. They're your financial BFFs, getting paid by you, for you.

  • Fee-Based Planners: These folks have a foot in both worlds. Yes, you pay them, but they might also get kick backs from selling you products, earning commissions that could sway their advice. Think of them as frenemies in the financial advising world.

Before you shake hands and share your financial dreams, pop the big question: "How do you make your money?" The array of answers might range from straightforward to "I need a financial dictionary, please."

Some advisors get a commission kick from investments and others might charge a flat fee. And then, there are those who double-dip: they'll charge you a management fee and also collect a "thank you" check (12b-1 fee) from mutual fund companies for favoring their funds. Tricky to spot, these fees are like ninjas in the financial world.

The plot thickens with advisors who mix it up: charging you for managing some assets, while pocketing commissions on others, especially if they're peddling insurance or annuities.

Why does this all matter? Because the way your advisor gets paid can affect the advice you receive and the holdings in your portfolio.

Fee-only advisors wear the white hats here; they're legally bound to put your interests first and give you straightforward advice that makes sense for your situation—not theirs.

Fee-based advisors, however, might have dollar signs in their eyes when recommending products, which could sway their advice, and lead to serious conflicts of interest.

At Guardian Wealth Management, we are fee-only fiduciaries, which means no commissions, no kickbacks, just solid, unbiased advice designed to make your financial goals come true. If your portfolio does well, we're celebrating with you. If it's not, we feel it too.

We charge a straightforward .75% to .90% on assets under management because we believe in making money with you, not off you.

Do you think your current financial plan might have been designed with someone else's interests at heart? Contact us for a no-strings attached, complimentary and confidential second opinion. We're here to ensure your financial strategy is all about you.


The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information and should not be considered a solicitation for the purchase or sale of any security. Investment advisory services are offered through Guardian Wealth Management, an SEC Registered Investment Advisor.