What "Fee-Only" Means

Financial advisors get paid in different ways, and the structure affects the advice you receive. A fee-only planner is paid only by clients, through a flat or hourly fee — not commissions from selling investments, insurance, or annuities, and not payments from fund companies for recommending certain products.

This differs from "fee-based," a similar-sounding term. Fee-based advisors charge a fee but may also earn commissions on certain products. It's worth asking any advisor directly how they're compensated, since the two terms are often confused.

What "Advice-Only" Adds

Many fee-only advisors charge a percentage of the assets they manage for you, called “assets under management” (AUM). Under this model, they typically hold and manage your accounts directly, and their fee scales with your account size.

Advice-only is different; the advisor doesn't manage your investments or hold your accounts. Instead, they charge a flat or hourly fee purely for advice and planning — you keep your accounts where they are and implement recommendations yourself. The fee doesn't scale with how much you invest, so cost stays predictable regardless of account size.

Bottom Line

Fee-only and advice-only are compensation models built around transparency — you know upfront exactly what you're paying and what it covers.