Definition
What is a fee-only financial advisor?
A fee-only financial advisor is paid only by their clients — never through commissions, product sales, or referral arrangements. Compensation is fully disclosed, most often as a percentage of the assets the advisor manages, which removes the incentive to sell products for a commission.
Fee-only is different from “fee-based,” which allows an advisor to earn both client fees and product commissions. The distinction matters: commissions can create an incentive to recommend the product that pays the advisor most, rather than the one that serves you best.
Because a fee-only advisor’s compensation comes only from clients, their interests are aligned with yours. It is one of the clearest structural ways to reduce conflicts of interest.
Related terms
This definition is for educational purposes only and does not constitute investment, tax, or legal advice. Rules and thresholds change; consult a qualified professional about your situation.