What is a Fee Only Advisor?
When starting Vonera Wealth, I had certain values that I wanted to make sure I adhered to. The biggest one was being a fee-only advisor. It’s a straightforward word, but it can lead to some confusion.
The basic premise is that the client pays the advisor a fee. I want my pay to be transparent to the client and I don’t want an incentive to recommend one product or style over another. I want to be able to sit with the client and truly partner with them on their decisions.
When I was looking to get into the business over two decades ago, most firms I spoke with would sell products to clients and get paid a commission. Some of these firms would even run contests such as whoever could sell the most of X product would win a free Mercedes. I didn’t exactly like this arrangement. Part of why I was getting into this business was to help my parents retire, and it just didn’t feel right. It doesn’t mean that every advisor compensated that way is a bad advisor, it’s just something I feel strongly about. I want to be straightforward with my clients.
One thing worth mentioning: fee-only is different from fee-based, even though they sound almost identical. A fee-based advisor can still earn commissions on products they sell you. It’s close enough to cause real confusion.
Being fee-only also goes hand in hand with being a fiduciary. That’s a fancy word that simply means I’m legally obligated to act in your best interest. Not kind of in your best interest. Not mostly. Fully. It’s the standard I hold myself to, and it’s the kind of relationship I want to have with every client.
So how do I get paid? A few ways. The most common is called Assets Under Management — a fee based on a percentage of what I manage for you. A lot of people like this because it aligns my pay with your account. Honestly, it speaks to me too. And sometimes there’s a need for advice outside of that, so I can also structure a flat fee arrangement.
No surprises. No hidden incentives. Just straightforward advice from someone who’s actually on your side.