Fee-based or fee-only financial advisers?

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

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.


Show Bankrate's community sharing policy
          Connect with us

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

CDs and Investment

Where should I put my money?

Dear Dr. Don, I would like to begin investing money to use in retirement. I want to be conservative with these investments, and I don't know where to begin. Any advice on retirement investing would be appreciated. Thank... Read more



Sheyna Steiner

Are quarterly earnings too hyped?

Companies release reports on earnings every quarter. As a result, critics say, businesses manage for the quarter rather than for the long-term.  ... Read more

Partner Center

Connect with us