Hey guys, welcome to the leading financial advice career website!

After reading this article, we guarantee you will have a comprehensive knowledge and understanding of who a fee-only financial planner is and how you can set your setup for success on this career path.

Specifically, we’ll cover:

What does a fee-only financial planner do?
How to become a fee-only financial planner
How important are your fee-only financial planner rates?
Certifications and requirements for the best fee-only financial advisors
The difference between fee-only vs. fee-based financial planning

Without any further delay, let’s get you up to speed.

fee-only financial planner

What is a Fee-only Financial Planner?

Fee-only financial planners are licensed as investment advisors who have a fiduciary obligation to operate in the best interests of their customers.

The above statement implies that as a financial planner, you have a fiduciary duty to act in the best interests of another entity or person, helping them attain their financial goals.

You don’t take any commissions or payments depending on product sales.

However, fee-only financial planners are paid a given rate for their financial planning services – we’ll expound on this further in the next sections.

What Does a Fee-only Financial Planner Do?

If a financial planner is termed fee-only, the implication is that they are paid only based on their clients’ fees for the services they deliver.

The fee-only planners barely get paid commissions or kickbacks for suggesting specific products to clients.

As a result, the possibility of an inherent conflict of interest is lower for a fee-only financial planner, and it is for this reason most people frequently prefer them.

Also, financial planners can find themselves either employed in a financial planning firm, working part-time or on a contract basis for insurance companies (life insurance, health, and other insurance products), a brokerage firm, or in investment management.

Let’s discuss how to become a fee-only financial planner next.

How to Become a Fee-only Financial Planner

The importance of your fee-only financial planner rates 

Becoming a fee-only financial planner is one of the most important decisions you can make as a professional trying to work in your customers’ best interests.

However, the transitioning Fee-Only financial planner must make additional decisions once that decision is made.

Being a financial advisor is similar to being a therapist in that you share in your clients’ most important life events, such as retiring and dealing with inheritance issues.

You are frequently tasked with assisting them in addressing their fears, such as budgeting, structuring annuities, recessions, or even the possibility of bankruptcy.

As a result, it entails entrusting you with intimate financial details, and earning that trust necessitates passing rigorous exams and adhering to the highest levels of professionalism and integrity.

One prominent attractive feature of a profession as a financial advisor is that it is open to nearly everyone.

However, you need to meet the following requirements.

A bachelor’s degree is required 

Although it is not required to be in a specific major, it will likely help with the exams a lot.

You can also decide to diversify your skills by enrolling in finance, investment, estate planning, and risk management courses.

Obtain industry licenses or certifications

Your employer or career path typically determines the required industry licenses or certifications.

You can work for a broker-dealer, a bank with a financial planner division, or a smaller, independent organization as a financial planner.

Therefore, the licenses and certifications you require to become a fully equipped financial advisor will depend on where you work and the level of services you provide clients.

It is, however, essential to note that if your role does not involve the actual selling of investment products, you might not even need Financial Industry Regulatory Authority (FINRA) licenses.

Instead, you could get your CFP results, but this is not to say that obtaining your CFP designation is easier than obtaining your FINRA license.

The Importance of Your Fee-only Financial Planner Rates 

Fee-only financial planning entails utterly unbiased advice.

It’s as simple as that.

However, when it comes to making critical financial decisions that will affect your future, you need to know that your advice is free of potential conflicts of interest and isn’t motivated by a sales commission.

Financial planning proudly stands behind the promise to provide you with objective advice tailored to your specific needs and goals.

A fee-only financial planner fiduciary has to act in your best interests.

That is something that not many “financial advisors” can say.

However, that means that the rates that financial planners receive for their work are vital because, as pointed out earlier, they do not rely on commissions but a flat fee.

So, how much is a fee-only financial planner’s rate?

According to Smart Asset, how much your charge depends on your services, the type of clients, your experience, and your location.

You can choose to be an hourly fee financial planner charging between $200 to $500 an hour or select a more annual fee.

We also recommend checking professionals working in the fee-only network to get accurate comparables.

You wouldn’t want to chase potential clients because of the financial planner’s cost or rates.

With these payment plans, advisors can engage with a “wider range of clients and handle a wider range of financial needs.”

This information should guide you on whether being a fee-only financial advisor is the best route for your financial career.

Certifications, Training, and Requirements for The Best Fee-only Financial Planner Advisors

Bearded Indian Businessman in his office

Before becoming a fully certified fee-only planner, there are some requirements and requirements you will require to achieve this.

The Certified Financial Planner Board of Standards details some of these requirements as:

Take the CFP Board Course

Completing an education program approved by the CFP Board for your education means you have several options.

Once you’ve finished it, you must notify the CFP Board.

Many of the coursework providers can help you with that.

Take the CFP Exam

You will be able to do so once the CFP Board has been notified of your education completion.

The CFP test is usually given three times annually, in March, July, and November.

You must take the exam at one of the CFP Board-approved locations.

There is a 5-day window when you are to submit the test.

You can consider registering for the exam before completing your program.

Still, you must receive the verification of your education completion by the education verification deadline, or you will be charged a $100 withdrawal fee.

Earn a Bachelor’s degree

Within five years after taking and passing the CFP exam, you must earn a bachelor’s degree from an accredited university or college.

You can take the exam ahead of time, but you must complete your degree within the 5-year time frame.

Demonstrate Financial Planning Knowledge

This can either be professional experience in relevant personal financial planning activities, usually 6,000 hours, or apprenticeship experience of 4,000 hours, which meets additional requirements.

Meet the CFP Board’s Fitness Standards

You must meet the Candidate Fitness Standards of the CFP Board.

To do so, you must agree to follow their set ethical standards.

You must also disclose any criminal or employment termination history and pass a background check.

Checking a potential fee-only adviser’s track record for ethical actions before entrusting him with any funds is also essential for the clients.

You can verify if a financial adviser has ever been reprimanded for any unlawful or unethical activities using the Financial Industry Regulatory Authority’s BrokerCheck.

According to research by the CFP board, almost 60% of CFP graduates know someone who is a victim of fraud or abuse at the hands of another consultant; therefore, proceed with caution.

The Advantages of Choosing a Fee-only Planner’s Career Path

Offer highly unbiased advice to clients

One of the most significant benefits of working with a fee-only financial advisor, unlike the fee-based, is that most of these professionals act as fiduciaries.

Fiduciaries are bound by certain ethical obligations, the most important of which is the duty to always act in your best interests.

It entails providing advice tailored to your investment goals and objectives while avoiding potential conflicts of interest.

Again, this is related to the framework of their fees.

In comparison, the fiduciary standard does not apply to fee-based advisors.

A fee-based advisor may recommend products or services to you based on the commission they may earn instead of how well it fits into your investment plan.  

Increases the Relevance of Professional Advice and Guidance

Fee-only financial planner Guidance

Even supporters of passive investing appreciate the significance of professional assistance and guidance, and going fee-based emphasizes that value.

Your practice members can focus on being great investors rather than great salespeople, demonstrating the added value that only professional guidance can provide to their clients.

If your practice as a financial advisor has not yet transitioned to a fee-based model, it may be time to do so.

The fee-based model is the industry’s future, with numerous advantages for clients, practice owners, and the financial planning industry.

For example, going fee-based can increase the value of your AUM.

It also creates incentives for your advisors to make sound decisions and help you build your confidence in your client base, which is highly recommended for this practice.

A fee-only financial planner is almost always a fiduciary

A fee-only planner is typically a fiduciary or someone who has been entrusted with your valuable assets.

The fiduciary is expected to act in the client’s best interests rather than for the sake of profit.

During the financial relationship, they are expected to be legal and ethical.

The average broker is not a fiduciary and is held to a much lower standard which is usually the case with the fee-based.

Smart marketing

In the financial planning and wealth management industry, differentiation can be a real issue, with the average client having difficulty assessing the value of a given firm.

Going fee-based can help you distinguish your practice from competitors, thus making marketing your business much more manageable.

Significantly greater flexibility

Changing to a fee-based model can provide your practice with the best of both worlds.

The flat percentage fee you charge will rise concurrently with the assets under management’s value, increasing your profits and assisting your practice to flourish.

Simultaneously, you will be free to recommend a limited number of commission-based products.

These investments are appropriate for your clients and give your consultants and brokers leeway when providing recommendations as an investment adviser.

The cons of being a fee-based advisor

Like other professions in different fields, you will face some challenges.

For those looking to have a financial planning fee-based profession, you can think around the following:

Conflicts in portfolio composition

Many financial planners demand a greater fee for equities assets, such as stocks and mutual funds, than fixed-income portfolios.

It may attract a manager to invest more of your money in equities than is appropriate for your unique financial situation.

However, you’re better off with a higher share of your portfolio in equities when you’re young since you have decades to recover if the market crashes.

Conflicts in asset consolidation

According to a report by Wall Street Journal, there could be a conflict of interest if you choose a fee-based investment adviser over a fee-only investment advisor to manage your retirement savings in employer-sponsored plans such as the 401(k)s or 403(b)s.

This is because you’re now investing more money with your adviser by rolling the assets into a qualified retirement plan administered, increasing the fees they receive from you.

The agony of paying

According to psychological research, we dislike paying for things.

When we part with our money, we feel pain, and this pain increases as the transaction becomes more visible, given that the fee-based financial planners do not fully disclose the commission.

As a result, it may be more difficult for you to part with $1,000 in a single transaction than to have $1,000 deducted from your account gradually over a year.

To overcome this, it is critical to comprehend the value of a financial plan.

The Difference Between a Fee-only vs. a Fee-based Financial Planner

The two main fee structures for financial advisors are fee-only and fee-based.

Fee-based investment is popular because advisors can earn money from fees paid directly by clients and commissions or discounts from products they’re licensed to sell.

Although they are not obligated to explain to their clients how their compensation is determined because the advisor’s income is affected by the financial products that the client chooses, the fee-based model creates numerous potential conflicts of interest.

In contrast, fee-only planners do not sell any financial products.

If their clients require products, for example, insurance, they work with trusted professionals, but there is no fee-splitting or other incentives involved in selling merchandise.

Instead, fee-only advisors typically charge a percentage of the assets they manage but can also charge for their time in some other way (hourly, retainer, etc.).

With this fee structure, conflicts of interest are kept to a minimum.

Additional Guidance for Fee-Only Financial Planners

Additional Guidance for Fee-Only Financial Planners

Roughly one-third of financial advisers are between 55 and 64, implying that broker-dealers and custodians may lose assets as advisors leave the profession.

At the same time, the data suggests that these elderly advisors have been putting off succession planning.

As a result, young fee-only financial advisers may soon find themselves in a job market desperate for their expertise and services.

New financial planners should know the following guidelines to make the most of their opportunities.

  • Because the global financial markets are constantly changing, financial advisors must keep their knowledge up to date by enrolling in continuing professional development courses.
  • Financial advisors set themselves apart by interacting with clients on a human level to provide superior long-term value. Young financial advisors should remember the importance of relationships in an increasingly computerized society.
  • To maintain their value to customers and employers, young advisors should always read literature, take online courses, volunteer with professional organizations, and obtain new educational certifications.


Fee-only financial planners are free to offer a more extensive range of alternatives to help you achieve your goals because they are not tied to any single company.

On the other hand, commissioned planners are more likely to limit their recommendations to things that will bring them the most incredible money.

Some even specialize in their company’s services, so you won’t get the comprehensive counsel you’d get from a fee-only advisor.

Furthermore, a fee-only financial planner provides fewer services than the fee-based financial planner’s commissions for selling insurance or trading stocks.

While the absence of commissions eliminates any conflicts of interest, it does mean that you’ll have to deal with a different expert for trades and insurance purchases.

Fee-only Financial Planner

Frequently Asked Questions


Smart Asset

Certified Financial Board of Standards

Wall Street Journal

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