Financial Planning

Looking for a Fee-Only Financial Advisor?

By  Brian Thorp

Disclaimer: To make Wealthtender free for our readers, we earn money from advertisers, including financial professionals and firms that pay to be featured. This creates a natural conflict of interest when we favor their promotion over others. Wealthtender is not a client of these financial services providers. Learn how we operate with integrity to earn your trust.

Find fee-only financial advisors who are ready to help with your financial planning needs so you can enjoy life more with less money stress.

Before hiring a financial advisor, it’s important to first consider your own financial planning priorities. In this guide, we’ll share a few quick tips to help you get started in your search and introduce you to fee-only financial advisors featured on Wealthtender you may want to add to your shortlist.

What is a Fee-Only Financial Advisor?

It is important to avoid conflicts of interest when hiring a financial advisor, but that is easier said than done. The majority of financial professionals are actually salespeople, paid to tout products and services their clients may or may not need. Worse yet, some of those financial products are overpriced, and others are simply unsuitable for the needs of the client.

While there are laws designed to protect financial planning clients, consumer protection agencies say they are often inadequate to the task. If you want to be smart about your finances, you need to take an active interest in the process, and that starts with hiring a professional you can trust – one who is paid to put your best interests first.

Unlike their commission-paid and fee-based counterparts, fee-only financial planners are paid directly by their clients. And since they are not compensated based on the products and services they recommend, they are free to provide expert guidance based on the best interests of the individuals they serve.

That does not mean, of course, that all fee-only financial planners are the same or that just anyone will be suitable for your needs. Some fee-only financial planners have been around for decades, while others are new to the industry. If you want to hire a financial planner who has your best interests at heart and the skills to make it happen, you need to ask the right questions.

How Much Does a Financial Advisor Cost?

➡️ How Much Does a Financial Advisor Cost? Read the Article

Questions to Ask a Fee-Only Financial Advisor

Here are some key questions to ask and things to know when interviewing a fee-only financial planner.

What Are Your Fees and How Are They Collected?

Since you will be paying the fee for the financial planning services you receive, it is important to know what those fees are and how they will be collected. Some fee-only financial advisors require an up-front payment based on time spent and services provided, while others take a percentage of the total portfolio as their only form of compensation.

There are pros and cons to both types of compensation. A flat fee is simpler and more predictable, but you will pay the same amount no matter how well or poorly your portfolio performs. Under this type of arrangement, the financial planner does not have a huge incentive to improve your performance over time.

A financial planner who is paid based on the value of the portfolio has a strong incentive to ensure good performance, but this type of arrangement could entice the planner to ramp up the risk. It is important to discuss your goals and your tolerance for risk when working with this type of financial professional.

How Should I Prioritize My Investments?

An experienced fee-only financial planner will work with you to prioritize your investment vehicles, from your 401(k) at work and your separate IRA account to your emergency fund and short-term savings. It is important to know how the financial planner views these various accounts and what strategies they will use to prioritize their funding.

There are a number of factors to consider when prioritizing investment accounts, and a good financial professional will take them all into account. An experienced financial planner will also recognize that funding priorities change over time – a young worker may prioritize tax-free retirement accounts like the Roth IRA, while an employee who is nearing retirement may put more into a 401(k) account or after-tax savings.

Do You Invest in the Products You Recommend?

Even though they do not directly profit from the products and services they recommend, every fee-only financial planner will have their preferred vehicles. Before you invest with any fee-only professional, you should ask if they put their money where their mouth is.

Always ask the financial planner if they invest in the same products they recommend to their clients. A financial planner who is unwilling to invest in their own recommendations is unworthy of your business – or your trust.

How Do You Determine Your Clients’ Risk Tolerance?

Risk tolerance is a critical subject for every investor and every client of a fee-only financial planner. Unfortunately, it is not always easy for an individual investor to know how much risk they can tolerate or how many paper losses they can take until a market downturn takes place.

That is why it is so important for potential clients to ask how their planners determine the risk tolerance of their clients. A simple interview may not be enough to determine the real level of risk tolerance, and a good fee-only financial planner will always delve deeper. If you want your fee-only financial planner to make appropriate recommendations, he or she needs to truly understand your tolerance for risk.

What is Your Strategy for Rebalancing?

Your investment priorities do not stay static over time – they change and evolve as you go through the various stages of your life. A young person may be perfectly happy with a stock-heavy portfolio, while an older worker nearing retirement may need to take a more balanced approach.

Strategic rebalancing is a key part of successful financial planning, and it is important to know how your would-be advisor plans to handle that process. Always ask the fee-only financial planner how they approach rebalancing and what techniques they use to reap profits and invest in asset classes that are temporarily undervalued.

Do You Keep Up With (and Prepare For) Tax Law Changes?

The tax code is a critical part of the financial planning process, and it is important to know how the fee-only financial planner approaches it. You cannot expect your fee-only financial advisor to moonlight as a tax expert, but you should expect them to have a solid knowledge of the tax code and how it works.

It is especially important for fee-only financial planners to stay abreast of changes in the tax law. This information will help them make smart recommendations to their clients – advice that will help those clients keep more money in their pockets.

When interviewing fee-only financial planners, always ask about their familiarity with the tax code and what changes they are making to their investment recommendations. The answers to these tax questions could be enough to tip the balance in favor of one advisor over another.

If you want to hire a professional who truly has your best interests at heart, it pays to seek out a fee-only financial advisor. Fee-only planners do not suffer from the same conflicts of interest as their commission-only and fee-based counterparts, and that could be good news for you and your portfolio. Now that you know what questions to ask, you can find a professional who is ready to put your interests first.

Get to Know Fee-Only Financial Advisors

📍 Click on a pin in the map view below for a preview of fee-only financial advisors who can help you reach your money goals with a personalized plan. Or choose the grid view to search our directory of financial advisors with additional filtering options.

Michael Jensen, CFP® Falcon Wealth Planning Planning Made Simple.
Serving Clients Nationwide
Irvine, California
Adell, Harriman & Carpenter, Inc. Your financial home for every season of life.
Houston, Texas
Charles F. Hall Jr. Clear Rock Advisors Managing Wealth for Generations
Serving Clients Nationwide
Austin, Texas
Ty Sanders Clear Rock Advisors Managing Wealth for Generations
Serving Clients Nationwide
Austin, Texas
Corey Long, CFP® Clear Rock Advisors Managing Wealth for Generations
Serving Clients Nationwide
Austin, Texas
Corey Noyes, AAMS Balanced Capital Align Your Portfolio With The Kind Of World You Want To Create
Heber City, Utah
David DeWitt DeWitt Capital Management Podcaster 🎙️, financial planner💸, and ADHDer. 🦋
Wayne, Pennsylvania
The Goff Financial Group Fee-Only | Fully Independent | Fiduciary
Serving Clients Nationwide
Houston, Texas
Showing

📍Double-click or pinch pins to view more.

Expert Insights: What are the Benefits of Hiring a Fee-Only Financial advisor?

Elizabeth Alf, CFP® Enlightened Financial Planning

If you choose to work with a fee “only” advisor, you can feel confident that the advisor is not basing any recommendations on potential compensation to them. Fee “only” advisors are able to provide insurance and investment recommendations that solely reflective of what is in your best interest.

Show more

Elizabeth Alf, CFP® | Clerestory Advisors

Smart Tips for Finding a Financial Advisor

Before hiring a financial advisor, here are a few quick tips to help you find the best advisor for you.

1. Decide Which Services You Need

Before hiring an advisor, determine what services you need from them. Whether it’s full-service investment management or a plan focused on a specific area of your finances, put together a list of what you’d like help with before contacting an advisor.

Though most people use a financial planner simply to invest for retirement, this is only a small part of what many advisors offer. Here’s a quick rundown of potential services a financial advisor may offer you:

  • Budgeting and money management
  • Debt management
  • Insurance planning
  • Retirement planning
  • Other investment planning
  • Inheritance planning
  • Estate planning
  • Tax planning

As you can see, financial advisors can help you with your entire financial picture, not just investing. As you start to plan for life’s bigger milestones, you should consider finding a financial advisor that specializes in those areas.

Finding the right advisor can help you minimize risk, maximize gains and take advantage of tax breaks while investing for your future. They can also help you protect your assets with the right kinds of insurance and help you pass on your financial legacy with a proper estate plan.

2. Consider Your Budget and Payment Preferences

Once you have a list of services you would like, review the fee structures financial advisors offer. Finding a balance between the services you need and the cost of those services will help narrow down the field of advisors you may want to work with.

If you are looking for a full-service advisor to manage all of your investments, consider searching among fee-based financial advisors. If you want to manage your money yourself, consider the flat fee and monthly subscription advisors for ongoing support.

3. Interview Multiple Financial Advisors

Once you have chosen the services and fee structure you prefer, it’s time to contact a few advisors and interview them. Here are questions to ask financial advisors:

  • What services do you provide?
  • What are all the ways you get paid? (fee transparency)
  • What is your investment strategy?
  • How do you measure investment performance?
  • How do we communicate about my plan?

Interview multiple advisors to get a feel for who you want to work with. A combination of fees, services, and customer service will help you determine the best fit for your financial advice.

4. Review Financial Advisor Credentials

Once you find an advisor (or two) you feel comfortable with, it’s always a good practice to check their credentials and the firm’s details. You can do this at the Investment Adviser Public Disclosure (IAPD) website

You can check both the individual and the firm to view their background and experience details, as well as any disciplinary action taken against them or their firm.

As licensed financial professionals, there is oversight into how financial advisors conduct business, so running a quick (free) check on them is recommended.

For additional information about advisor credentials, read our article to learn the most popular designations held by financial advisors, as well as specialized credentials which may be important to consider if you have unique financial planning needs.

🙋‍♀️ Have Questions About Hiring a Fee-Only Financial Advisor?


Frequently Asked Questions & Additional Resources

How do I know if I’m ready to hire a financial advisor?

You should strongly consider hiring a financial advisor if you have a significant amount of money available for saving or investing. This could occur after years of making annual contributions to a retirement plan like a 401(k) through your employer or suddenly if you receive a large inheritance or sell your house for a large profit.

But even if you don’t have a lot of money saved, many financial advisors and planners provide reasonable pricing options and valuable services you should consider, especially if you’re facing a significant life event. For example, if you’re starting a new job, getting married, starting a family, getting divorced, lost your job, starting or selling a business, or approaching retirement age, working with a trusted financial advisor or planner may prove worthwhile.

Before I hire a new financial advisor, should I fire my current advisor?

You don’t need to fire your current advisor before beginning your search for a new financial advisor. In fact, your new advisor can help coordinate the transition of your assets from your previous financial advisor.

Where can I read reviews about financial advisors written by their clients to help me decide if I should hire them?

After 60 years of regulatory prohibition of financial advisor reviews in the US, a rule issued by the Securities and Exchange Commission (SEC) became effective on May 4, 2021 that means both financial advisors and directory websites that help consumers search for a financial advisor can collect and display financial advisor reviews, an important factor worth considering when choosing who you’ll hire to manage your investments and life savings. 

Wealthtender is the first independent advisor review platform designed to be fully compliant with the new SEC rule, and we look forward to helping you evaluate financial advisors based on reviews written by their clients.

I’m a financial advisor interested in being featured in this guide. How do I get started?

Thanks for your interest. We look forward to learning more about your practice and helping you attract your ideal clients where you may be a good fit based on their individual needs and circumstances. Please click here to learn how you can join local financial advisors featured on Wealthtender.

About the Author
A headshot of Brian Thorp, the founder and CEO of Wealthtender

About the Author

Brian Thorp

Brian is CEO and founder of Wealthtender. He and his wife live in Texas, enjoying the diversity of Houston and the vibrancy of Austin.

With over 25 years in the financial services industry, Brian is applying his experience and passion at Wealthtender to help more people enjoy life with less money stress.

Connect with Brian on LinkedIn

Disclaimer: To make Wealthtender free for our readers, we earn money from advertisers, including financial professionals and firms that pay to be featured. This creates a natural conflict of interest when we favor their promotion over others. Wealthtender is not a client of these financial services providers. Learn how we operate with integrity to earn your trust.