Why fee only matters.
Every investor should feel as though their financial advisor is working to provide them with the guidance and investment options that will best suit their needs. The truth is, that isn’t always the case. At RIADB, we want to connect investors with advisors that operate with their clients in mind, without any conflicts of interest.
Search from thousands of fee only RIAs and find the right match for your future.
Every investor should feel as though their financial advisor is working to provide them with the guidance and investment options that will best suit their needs. The truth is, that isn’t always the case. At RIADB, we want to connect investors with advisors that operate with their clients in mind, without any conflicts of interest.
What is Fee-Only?
At RIADB, we have curated a database of advisors that do not receive fees, commissions, or other forms of compensation from another party based on the referral of a client or the client’s business. We advocate for advisors that work only for you, without any other party in mind.
Fee-Only financial planners are registered investment advisors (RIAs) whose compensation is solely comprised of fees paid by their clients. These advisors are not burdened by the conflicts of interest that are inherent in accepting income from other sources, such as brokerage fees or commissions on product sales. It leaves them only with a fiduciary responsibility to act in their clients’ best interest and the ability provide more comprehensive advice.
What is the difference?
A small change in terminology can make for a big difference in meaning. Many commission-based agents refer to themselves as fee-based financial planners. Don’t let this title fool you. Contrary to Fee-Only RIAs, “fee based” brokers and financial advisors simply charge their clients the expected fees while leaving themselves the option to collect commissions on products or services that they sell you, whether you need them or not.
Fee-Only Advisors
charge a flat fee or rate for managing a client's money. Their only incentive is for their clients' investments to do well.
Brokers
earn commissions by selling investment products and conducting transactions, often in addition to their fees.
Finding the right professional
With so many different types of financial advisors working with individuals to plan and improve their futures, how do you know which one you should be working with?
Financial Advisors are professional asset managers who help clients save, invest and grow their money, such as Registered Investment Advisors (RIAs) and Certified Financial Planners (CFPs). These should not be confused with other industry professionals, like stockbrokers, who handle stock market trades, or accountants, who can help you save on your taxes. Financial advisors are focused on what you can do with the wealth you have accrued to ensure it continues to grow and act as a safety net for yourself and your family for years to come.
While it is safer to choose an advisor who is an RIA, simply having the letters next to their name or firm doesn’t guarantee that they are providing you with conflict-free advice. You want to ensure that your advisor is a fiduciary, meaning they are obligated to act in your best interest. How can you tell if an advisor is operating with your interests in mind? Read on to find out.
Compensation is Key
One of the best places to start when determining the integrity of a given advisor is to understand where they earn their money.
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- beware lower “adjusted” fee because it may be made up for somewhere else (higher fee investments, product commissions etc)
- RIAs offer same products sans commissions, legally obligated to take out commission fee
- Products offered by RIAs are less expensive because RIAs know that it will be charged on top of their fee
- Someone who is a broker is not a money management firm