Financial advisors who do not charge fees: what are they?

What is a fee-only financial advisor?

Fee-only financial advisors are compensated directly by their clients. There are three basic models for how financial advisors can be compensated:

How do fee-only financial advisors work?

When considering the source of someone’s salary, it can give you an idea of where their loyalties lie. A fee-only financial advisor can only receive compensation from you as a client, and not from a brokerage firm, mutual fund company, insurance company, or any other source. They represent you and your interests when providing advice.

Fee-only financial advisors versus commission-based advisors

A commission-based financial advisor can receive fees paid by you as well as commissions they receive from a brokerage firm, mutual fund company, insurance company, or investment partnership. The advisor must disclose these fees to you.

Finding a fee-only advisor

Many fee-only financial advisors belong to an organization called NAPFA, which stands for the National Association of Personal Financial Advisors. Individuals can only join NAPFA if they work as fee-only financial advisors. NAPFA offers a search feature on its website to help you find a fee-only advisor near you.

Source: https://www.thebalancemoney.com/what-is-a-fee-only-financial-advisor-2388452