investing

Fee-based or fee-only financial advisers?

Identifying the right adviser
Identifying the right adviser © Andy Dean Photography/Shutterstock.com

Lemoine says it is a mistake to assume that a fee-only planner is superior to a fee-based adviser simply because the latter may earn commissions.

For example, he believes the fee-based approach can make more sense for an investor who does not have several hundred dollars to pay an upfront flat fee to a fee-only planner.

"I've encountered wonderful financial planners who work only on commissions," Lemoine says.

Joshua Itzoe, a partner and managing director at Greenspring Wealth Management in Towson, Md., has worked under three compensation models -- fee-only, fee-based and straight commission-based.

"It's important to realize that there are good and bad advisers in all three scenarios," he says.

Today, Itzoe works as a fee-only planner.

"I have found the fee-only method to be the simplest and most transparent model for clients," he says.

By contrast, with a fee-based or straight-commission model, "there can often be an incentive to sell one product over another" because the adviser makes more money when selling certain products, he says.

advertisement

          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

Start retirement savings at 24?

Dear Dr. Don, At age 24, I recently started a job working for a corporation. I'm interested in individual retirement accounts. I'd like to look at investing in stocks and bonds and learn more about choosing a 401(k) plan.... Read more

advertisement

Blog

Dr Don Taylor

Munis: If banks sell, do you buy?

Municipal bonds are debt securities issued by state and local governments to finance capital investment and other obligations.  ... Read more

Partner Center
advertisement

Connect with us