investing

Fee-based or fee-only financial advisers?

Is your adviser really 'fee-only'?
Is your adviser really 'fee-only'? © Jeanette Dietl/Shutterstock.com

Millions of investors count on their financial adviser to help them build wealth. But a tricky little turn of phrase can create confusion among consumers shopping for financial guidance.

It all boils down to the distinction between "fee-only" and "fee-based" advisers. While the two terms sound similar, there are crucial differences.

Craig Lemoine, assistant professor of financial planning at The American College of Financial Services in Bryn Mawr, Pa., does not believe that either the fee-based or fee-only approach is inherently superior.

"Is a piece of cheesecake superior to a piece of chocolate cake?" he asks, adding that both fee-based and fee-only approaches have strengths and weaknesses.

But he says all investors should understand the differences between the models.

"Consumer confusion can lead to trouble, both for the client and adviser," he says.

advertisement

Show Bankrate's community sharing policy
          Connect with us
advertisement
CD & INVESTING NEWSLETTER

Learn the latest trends that will help grow your portfolio, plus tips on investing strategies. Delivered weekly.

CDs and Investment

Mom earns little from savings

Dear Senior Living Adviser, My mom lives on her Social Security income just fine but has around $100,000 sitting in a savings account! She does not want to take any risk. Any ideas? -- Deb Depositor Dear Deb, It's great... Read more

advertisement

Blog

Dr Don Taylor

The siren song of closed-end funds

Morningstar is reporting that the number of closed-end funds has shrunk over the past five years.  ... Read more

Partner Center
advertisement

Connect with us