What You Should Know About Fees

Financial advisors and planners help you manage your investments and work toward your financial goals, such as estate and retirement planning. In return for their expertise and guidance, some advisors will charge a flat fee, while others work on commission. Some may even do both. But how are those fees determined and who pays for them? Whether you’re already working with an advisor or just starting to explore your options, make sure you understand their fee structures so that you can be sure that you’re getting the best fit for your needs. This overview can help you start that conversation.

Commission-based financial advisors

Financial advisors working on commission tend to be brokers compensated based on product sales. While they receive payment when you make an investment on their recommendation, other products may result in the commission not being drawn from your investment. In such an instance, they’re usually paid out by the investment product sponsor. In many cases, the advisor may receive an initial disbursement when the investment contract is signed and an additional commission for every year that contract remains active. Some financial products — life insurance, for example — are only sold on commission.

As a result, commission-based advisors are effectively representatives for certain products. They are held to a suitability standard, meaning product recommendations must be suitable to a client’s needs but may be more expensive than other options. Brokers can be incentivized to offer more expensive options to increase their commission. As a result, the commission may introduce the possibility of a conflict of interest in the advice these advisors provide.

Fee-based financial advisors

Some financial advisors will charge a set fee for their services. These fees may take the form of an hourly rate, a project fee, or a percentage of assets under management they handle on your behalf.

Additionally, some advisors may operate strictly on a single fee structure, while others may combine them. For instance, your advisor may begin working with a flat fee and then continue working on a percentage of the assets they manage.

In most cases, fee-based financial advisors follow the fiduciary standard in advisory relationships, which means they are legally required to act in their client’s interest, building plans and choosing products that are ideally suited to your needs. By law, they must recommend products and services to you that best meet your requirements rather than those that might provide them a commission.

Dual-registered advisors

In some cases, an advisor may be dual-registered, meaning they receive compensation from fee-based accounts, planning and consulting services and from commission-based accounts. This means they can act as fiduciaries when serving in an advisory relationship and also draw a commission when putting the plan into action. In such cases, the advisor may offer clients a roster of “preferred” financial products within their role as a fiduciary under their advisory relationship and collect commissions if and when clients invest in them. That said, if there are cheaper options that offer the same benefits as an advisor following the advisory based fiduciary standard, an advisor must present them as an option.

If you’d like to understand our fee structure, let’s have an open conversation so you can better understand the services we offer and how we charge for them. Additionally, you can use the Security and Exchange Commission’s Investment Advisor Public Disclosure website to look up our Form CRS, which outlines our services, fees, and any conflicts of interest. It’s important that you feel confident and informed about our working relationship, and we’re happy to provide you with any information you need to make the best decisions for your financial future.




Lazaroff, Peter. “What is a Fiduciary? Dual Registration Can Make It Harder to Tell.” Plancorp. https://www.plancorp.com/blog/is-your-advisor-a-fiduciary. Accessed 9 Feb 2023.

Pinkerton, Julie. “What to Know About Financial Advisor Fees and Costs.” U.S. News & World Report. https://money.usnews.com/financial-advisors/articles/financial-advisor-fees-and-costs. Accessed 9 Feb 2023.

Tarver, Jordan. “How Much Does a Financial Advisor Cost?” Forbes Advisor. https://www.forbes.com/advisor/investing/financial-advisor/financial-advisor-fees-and-costs/. Accessed 9 Feb 2023.

Wohler, Roger. “What You Need to Know About Fee-Only Financial Advisors.” Investopedia. https://www.investopedia.com/articles/investing/102014/feeonly-financial-advisers-what-you-need-know.asp. Accessed 9 Feb 2023.


The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Nicole Middendorf and not necessarily those of Raymond James. Expressions of opinion are as of this date and are subject to change without notice.

In a fee-based account clients pay a quarterly fee, based on the level of assets in the account, for the services of a financial advisor as part of an advisory relationship. In deciding to pay a fee rather than commissions, clients should understand that the fee may be higher than a commission alternative during periods of lower trading. Advisory fees are in addition to the internal expenses charged by mutual funds and other investment company securities. To the extent that clients intend to hold these securities, the internal expenses should be included when evaluating the costs of a fee-based account. Clients should periodically re-evaluate whether the use of an asset-based fee continues to be appropriate in servicing their needs. A list of additional considerations, as well as the fee schedule, is available in the firm’s Form ADV Part II as well as the client agreement.

Every investor’s situation is unique and you should consider your investment goals, risk tolerance and time horizon before making any investment. Investing involves risk and you may incur a profit or loss regardless of strategy selected.

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