If I weren’t a fee-only financial advisor, I would have some serious questions about what I should be looking for in an advisor. Do you know what it means when someone says they’re a fee-based advisor?

I left my position as a fully licensed financial advisor at a well-known wire-house investment firm and bank where I was paid on commission and offered fee-based services. I left and opened my own fee-only investment and planning firm. For those wondering what the difference is between commissions, fee based, and fee-only service, here’s a comparison of my observations…


  • Advisor is a Fiduciary required by law to act in your best interest
  • Registers as an Investment Advisor; is not a securities broker employed by a broker/dealer firm
  • Advisor compensation is fully disclosed and paid directly by the client
  • There is no additional compensation when a product is purchased
  • Your advisor can discuss how much you’re willing to pay for an investment product and tailor their investment recommendations to your specifications instead of choosing from a suite of similarly priced (and usually more expensive) offerings approved by their broker/dealer firm.


  • Recommendations need only meet a standard of suitability, not a fiduciary standard.
  • Compensation is tied directly to the purchase of a recommended product
  • Advice can be limited to product recommendations
  • Product recommendations are limited to an “approved” list by the broker/dealer firm
  • Proprietary products may have higher fees which are not required to be fully and clearly disclosed
  • Clients often believe there are no fees being charged for the advice when in fact the fees are simply hidden
  • Management pressure sales force to push certain products
  • Some advisors paid by commission are very honest, reputable, and intelligent individuals that are quite worthy of respect. They are very good at what they do, and very knowledgeable. The ones that are not in that category, however tend to hide amidst the really good ones, making differentiating who’s who difficult for the average consumer.



  • Refers to a fee structure in which commissions in the form of fees are payable to an advisor based on ongoing account management instead of trading activity
  • The term Fee-based often refers to “managed accounts” but they are not interchangeable

If you’d like to read more about the differences between service providers, my next post will compare my experience at a national wire-house to being founder and CEO of my own independent firm. Transitioning to being a fee-only advisor from commissions is closely related to changing from representing a firm to representing one’s self.

Of course, you can also ask me directly at Laurel@bespokenwealth.com!



About Laurel Hardy:

Mrs. Hardy is an investment advisor representative of and offers investment advisory services through Bespoke Wealth Management, LLC, a registered investment adviser offering advisory services in the State of Connecticut and other jurisdictions where registered or exempted. Main Office: 1476 Poquonock Ave, Windsor, CT 06095. Tel: 844-245-7135. Additional disclosures are available by visiting the disclaimer page of bespokenwealth.com.