Why Choose a Fee-Only Advisor?
Advisors are compensated in a variety of ways. Knowing how your advisor is paid can help you better understand if and when they have conflicts of interest. The 3 primary ways advisors are compensated are commission based, fee-based, and fee-only.
In a Commission-Based Model, the financial advisor earns commissions when they buy or sell certain investment or insurance products.
In a Fee-Based Model (which can also be referred to as a Hybrid Commission and Fee Model, or a Dually Registered Advisor) the financial advisor can earn fees through commissions on product sales, and from a percentage of assets that they manage.
In both cases above, it can be hard to differentiate between what’s best for your financial interest, and what’s best for your advisor.
In the Fee-Only Model, advisors never make a commission on the sale of products like mutual funds, annuities, or other insurance products. Fee-only advisors can be paid hourly, on a retainer, as a percentage of assets under management (AUM), or with a flat fee. Eliminating sales commissions reduces conflicts of interest between the advisor and the client.
All members of the Western Washington Financial Advisors Network are fee-only advisors. We believe the fee-only model is the best way to minimize conflicts of interest and provide advice that is always in your best interest.
