A fee-only financial advisor is paid only by their clients, never by commissions, referral fees, or other payments tied to selling financial products.
Fee-only advisors charge their clients directly: a percentage of assets they manage, a flat or retainer fee, an hourly rate, or a subscription. Because no one else pays them, they have no financial reason to recommend one product over another.
The term is narrower than it sounds. An advisor who takes fees from some clients and commissions on insurance or annuity sales is not fee-only, even if most of their income is fees. That arrangement is usually called fee-based.
Professional groups such as NAPFA and the XY Planning Network admit only fee-only advisors, which is why Wellspent uses their directories as one source for the fee-only basis of a listing.
How to check
Look up the advisor's firm on the SEC's Investment Adviser Public Disclosure site and read Item 5 of its Form ADV Part 2A (fees and compensation). A fee-only firm reports no commission compensation, and the individual should hold no broker registration. Wellspent runs this check for member profiles and shows the result.
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Related terms
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