Definition – What is a Fee Only Financial Planner?
According to the Certified Financial Planner (CFP) Board’s Standards of Professional Conduct, a fee only financial planner is defined as an advisor whose compensation is derived only from fees, not commissions.
Fees assessed to clients by fee only financial planners can be fixed, flat, hourly, percentage or performance-based in nature.
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However, it must not be associated with any type of commission that is generated by directly selling a third-party product or security.
Fee-only financial planners are able to manage assets for their clients, as well as provide financial advice.
Additional Overview – Fee Only Financial Planner
In the realm of financial planning services, it can be difficult to distinguish between the countless designations or labels that financial advisors are allowed to use within the industry.
As the shift to fee-based financial planning takes hold of the market, clients find themselves continually questioning how advisors are paid and what is truly in their best interest.
The majority of financial planning and asset management firms are labeled as fee-based, commission-based or a combination of the two.
In addition to these common terms, some financial planning firms are now deeming themselves fee-only financial planners which can cause quite a bit of confusion.
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