Why fee-only?
It comes down to philosophy. We feel that a fee-only arrangement promotes a healthy relationship with clients that focuses on the ongoing client relationship instead of the sale. If you think about it, a fee-only relationship motivates an advisor to find the best, most cost effective solutions available. Does a commissioned-based advisor have that motivation or is he/she influenced by large commissions on certain "products"?
As a fee-only advisor, we have the same goals and motivations as our clients. Our interests are not influenced by commissions as we cannot except them. For example, all our products that we provide are no load, meaning there are no 5% sales charges slapped on the front end of the mutual funds we suggest because we have no incentive to purchase loaded products. Another example are hidden fees such as 12b-1 fees buried inside many mutual funds. We cannot except this fee since it would be a conflict of interest. It is not in our interest to purchase a fund with the fee when we can purchase a less expensive fund without one.
You should be cautious about advisors that advertise that they are "fee-based". These are advisors that receive commissions only part of the time. We offer our clients exclusively fee-only relationships to ensure that we always do what is in your best interests.