Fee-Only vs. Fee-Based Advisor

A fee-only advisor is paid solely by clients and earns no commissions, while a fee-based advisor can charge fees and also collect commissions from products — which creates potential conflicts of interest. Fee-only advisors are typically held to a fiduciary standard at all times.

What is a fee-only advisor?

A fee-only advisor is compensated exclusively by the clients they serve — through a flat fee, hourly rate, or percentage of assets — and accepts no commissions, referral fees, or product kickbacks. This structure aligns the advisor's incentives with your results. Compound Wealth Advisors is fee-only.

What is a fee-based advisor, and why is it different?

"Fee-based" blends advisory fees with commissions, meaning the advisor can earn extra by selling certain products. The label sounds similar to "fee-only," but the compensation — and the conflicts — are materially different. Always ask exactly how an advisor is paid and request their Form ADV.

Why does the difference matter for my plan?

Compensation shapes advice. A fee-only fiduciary has no product to sell, so recommendations on investments, insurance, and tax strategy are driven by your goals rather than commissions.

Frequently Asked Questions

Is fee-only always better?

For most clients seeking unconflicted advice, fee-only is the cleaner structure. The right fit still depends on your needs and the advisor's qualifications.

How do I verify how an advisor is paid?

Ask directly and read their Form ADV Part 2 — ours is on the ADV 2A page.