Financial advisors are generally compensated in one of two ways. The traditional approach is a commission-based method. A third-party product provider pays the advisor a commission to sell you a product. In our opinion, this type of transaction can inherently create a conflict of interest.
In contrast, the fee-only only approach is a more transparent and objective method. This model minimizes conflicts and further helps to ensure that your financial planner acts as a fiduciary. Fee-only planners are compensated directly by their clients for advice, plan implementation and ongoing management of assets.