Direct answer
A fee-only advisor is compensated solely by the client, while a fee-based advisor can earn both client fees and commissions from product sales — creating a potential conflict of interest.
A fee-only advisor is compensated solely by the client. A fee-based advisor can earn both client fees and commissions from selling financial products, which creates a potential conflict of interest.
Why 'fee-only' matters
Fee-only advisors have one source of income: you. They cannot earn a commission by steering you into a particular annuity, mutual fund, or insurance product, so their recommendations have no hidden financial bias. Cognis is fee-only and a member of the fiduciary standard.
How to verify
Ask any advisor to put their compensation structure in writing, and check their Form ADV Part 2A on the Investment Advisor Public Disclosure website. If you see commission-based income disclosed, the advisor is fee-based, not fee-only.
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