On Your Side: How Fee-Only Advisors Put Clients First

Here's a concise explanation of the different types of financial advisors and how Keep It Simple Financial Planning operates:

Types of Financial Advisors:

1. Commissioned advisors: Earn money through commissions on financial products they sell.

2. Fee-based advisors: Charge fees for services but may also earn commissions from product sales.

3. Fee-only advisors: Charge only fees for their services, with no commissions.

Fee-Only Advisors and Fiduciary Duty:

Fee-only advisors operate under a strict fiduciary standard, legally and ethically obligating them to act in their clients' best interests at all times. This fiduciary duty is crucial because it eliminates many conflicts of interest inherent in other financial advisory models.

Conflicts in Commission-Based Models:

1. Product bias: Advisors may recommend products that offer higher commissions, even if they're not the best fit for the client.

2. Churning: There's an incentive to encourage frequent trading to generate more commissions.

3. Limited options: Advisors may only offer products from companies they have agreements with, limiting client choices.

4. Misaligned incentives: The advisor's income is tied to selling products, not necessarily to improving the client's financial situation.

In contrast, fee-only advisors avoid these conflicts through:

1. Transparency: Full disclosure of all fees.

2. Conflict-free advice: No incentive to recommend specific products.

3. Objective recommendations: Advice based solely on client needs.

4. Ongoing responsibility: Fiduciary duty extends throughout the relationship.

5. Legal accountability: Can be held responsible for breaches of duty.

Keep It Simple Financial Planning's Approach:

As an independent registered investment advisor, Keep It Simple Financial Planning embodies the fee-only model and fiduciary duty:

1. Independence: Not tied to specific products or institutions, allowing unbiased recommendations.

2. Client-centric focus: Success is tied to client outcomes, not product sales.

3. Comprehensive planning: Holistic view of clients' financial lives. Jason is a CERTIFIED FINANCIAL PLANNER® professional and has spent over a decade studying holistic financial planning. Many advisors just offer insurance or investment advice. While important subjects, these are just two pieces of a comprehensive financial plan.

4. Transparent compensation: Straightforward fee structure - consulting fees for planning services and a flat percentage for assets under management.

5. Ongoing relationship: Long-term partnerships with continuous monitoring and adjustments.

6. Education and empowerment: Helping clients understand their finances.

7. Customized strategies: Tailored advice for individual needs and goals.

This approach allows Keep It Simple Financial Planning to avoid the conflicts of interest present in commission-based models. By eliminating these conflicts and maintaining a clear fiduciary duty, we align our interests directly with our clients'. We truly sit on the same side of the table, working together towards our clients' financial goals without the pressure to sell specific products or generate commissions.

Our compensation model - fees for service and a percentage of assets under management - ensures that we succeed when our clients succeed. This creates a transparent, trust-based relationship where clients can be confident that our recommendations are made solely with their best interests in mind.