Fee-Only / Fiduciary

What is Fee-Only?

Financial advisors can be compensated in many ways. Traditionally, advisors have been paid mostly by commission, and as the industry has evolved, it has become more difficult for consumers to understand what they are paying and who the customer is. While financial regulations have increased, the industry has not become more transparent. In addition, anyone can call him/herself a “financial advisor” or “wealth manager,” even if he or she is paid to sell products on behalf of a financial institution or insurance company. Nothing is wrong with these models, but as a consumer, you may find it difficult to know what you are paying and why a solution is being recommended to you.

Fee-only means that an advisor is compensated solely by the client with neither the advisor nor any related party receiving compensation contingent on the purchase or sale of a financial product. In the industry, it is common for this term to be confused with “fee-based,” which means fee and commission. We believe that advisors will be loyal to their source of compensation. We commit to you that we will not take any compensation from any other source, which allows us to be loyal only to you, and not to any provider of financial products. If your attorney, accountant, or physician are paid by someone other than you, you might question the advice you are receiving. The same concept exists in financial planning. We are loyal to our clients because they pay us, and no one else does.

What is A Fiduciary? 

A fiduciary is one who acts solely in the best interest of another. The financial industry has blurred the lines as to what being a fiduciary means. In some cases, one can legally be required to be a fiduciary for some of the advice given but not for all, which creates a convoluted client relationship.  

Timberchase Financial, LLC has voluntarily held to a fiduciary standard and has committed to a fee-only relationship with our clients ever since our formation in 2004.

For further reading:

Pursuit of a Financial Advisor Field-Guide

What is Fee-Only Financial Planning?

Fiduciary 101: What is a Fiduciary?


Listen to Bryan’s 2008 "Focus on Fiduciary" Interview