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What Is a Fee-Only Financial Advisor & Why Does it Matter?

By Diana Blair

You didn’t make the decision to work with a financial advisor without some serious thought. After all, sometimes it feels like handing over your house keys to a stranger! Not only do you need to find someone you can trust with your finances, which is arguably one of the most important factors of your daily life, but you also need to find someone you can build a relationship with that will hopefully span several decades on your journey to financial success. This is not a decision you want to make blindly.

Now that you’re starting to research financial advisors, you’ve likely come across the term “fee-only.” This term is usually used to describe registered investment advisors (RIAs), who provide services and planning that, by law, can only be in your best interest. So keep your eyes open for “fee-only” when searching for a financial professional.

“But what exactly does that mean,” you might be asking, “and why is it important?”

So let’s discuss what it means to be a fee-only financial advisor—and why we at Sage Capital Advisors pride ourselves on this one little word.

How Do Advisors Get Paid?

To truly understand the value of a fee-only advisor, it’s first important to understand the different ways advisors can get paid. The three most common methods include:

● Commission-based

● Fee-based

● Fee-only

Commission-based advisors don’t charge fees to their clients. On the surface, this model sounds great. But these advisors have to get paid somehow, so instead they earn commissions from financial and insurance products they sell to their customers. Even if they mean well, commission-based advisors are often more motivated to sell products that will earn them the most money, rather than providing advice that is in the best interest of the client.

Fee-based advisors may sound like they’re fee-only, but they also make commissions from financial products and transactions. In addition to charging their clients fees, they earn a percentage of their revenue from selling products on behalf of brokerage firms, mutual fund companies, or insurance companies, thus placing them at the same risk for conflicts of interest as commission-based advisors.

Fee-only financial advisors are paid directly by their clients—and only by their clients. They don’t receive any type of kickbacks or commissions for recommending certain securities or investments. Their fees are typically structured as a small percentage of the assets they manage, known as assets under management (AUM) fees. Because fee-only advisors only get paid by their clients, they only succeed when you succeed.

What Are the Benefits of a Fee-Only Advisor?

The National Association of Personal Financial Advisors (NAPFA) believes fee-only advisors are the most transparent and unbiased advisors you can come by. They typically have one of two titles: either registered investment advisor or certified financial planner. If your advisor has one of these titles, you can rest assured that they’re fiduciaries and have your best interest at heart.

If you’re in the market for a financial advisor, here are three reasons why you should choose a fee-only advisor:

1. No Conflicts of Interest

No matter how pure an advisor’s intentions are, it can be hard to provide unbiased recommendations when they know they’ll get a kickback or commission. But this isn’t the case for fee-only advisors. They have no incentive to push certain products because they don’t sell any products at all. They’re solely compensated by you.

2. They’re Fiduciaries

Fee-only advisors are fiduciaries, which means they’re legally and ethically required to act in your best interest at all times. They’re loyal, quick to disclose any conflicts of interest, and only give advice based on your unique situation and goals.

3. You Get Objective Advice

It’s easy to act on emotion when you’re dealing with your own money. There’s talk of a stock market crash, so you want to change your investing strategy. A family member needs to borrow money, even though you know giving it to them would jeopardize your financial security. You want to live a comfortable life in retirement, but you’re not sure if you’re on track.

In situations like these, it’s nice to have someone you can go to for objective advice.

Why Sage Capital Advisors Is Fee-Only

At Sage Capital Advisors, our clients are our top priority, second to none. We take great pride in being transparent and unbiased, and in giving our clients undivided loyalty and dedication to help make their financial goals a reality. We don’t take our role in their financial journey lightly.

Is there a specific financial concern keeping you up at night? Do you need help developing a big-picture financial plan? If you’re feeling overwhelmed, remember that you’re not alone. We’re here to guide you every step of the way, giving personalized attention so you can experience financial peace of mind. To get started, contact us at (844) 279-7243 or by email at

About SAGE Capital Advisors

Sage Capital Advisors, LLC is an independent fiduciary and fee-only financial advisory firm headquartered in San Diego, California. Operating as a boutique firm since 2005, Sage Capital Advisors puts their clients’ interests first in all things and gives personalized attention so their clients can experience financial peace of mind. Providing a full range of investment and wealth management services, the Sage Capital Advisors team prioritizes integrity, due diligence, transparency, and customized strategies based on their clients’ individual situations and goals.

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