What Is a Fee-Only Financial Planner?

Written by Liz Smith

Edited by Jeff White, CEPF®

Edited by Patrick Villanova, CEPF®

Fact Checked by Jaclyn DeJohn, CFP®

Updated on May 8, 2025, 5:33pm ET

If a financial planner, financial advisor or another type of financial professional is fee-only, that means they receive compensation solely from the fees clients pay for their services. They do not earn commissions for recommending certain products or services, and this designation extends to the firm itself. A fee-only structure reduces potential conflicts of interest, which is why these types of advisors are often preferable.

To find a financial advisor who serves your area, try SmartAsset’s free matching tool.

What Is a Fee-Only Financial Planner?

Fee-only financial planners are advisors who operate on a fee-only basis to create budgets, plan retirement, pay down debt and help you set goals to reach other financial milestones. They collect fees from only you, generally as a percentage of your assets under management (AUM).

Fee-only advisors don’t receive any fees, commissions, referral fees, kickbacks or any other hidden forms of compensation. They are also often registered investment advisors (RIA) with either the U.S. Securities and Exchange Commission (SEC) or a state-level institution.

This payment structure can reduce the chances that the advisor will encounter a conflict of interest. Fee-only financial planners don’t earn additional compensation by recommending one investment product, insurance product or service provider over another. Fee-only financial planners work according to their fiduciary responsibility, meaning they must act in their client’s best interests.

Pros and Cons of Fee-Only Financial Planners

Fee-only financial planners offer clear advantages for clients seeking transparency and fiduciary responsibility, but their model also has potential drawbacks depending on your financial needs. Here’s a breakdown of the pros and cons to help you evaluate whether this approach aligns with your priorities:

Pros of Fee-Only Financial Planners

Fiduciary obligation: Fee-only advisors are legally required to act in your best interest, helping to reduce conflicts of interest when offering advice.
No commissions: Because they don’t earn money from product sales, their recommendations are generally more objective and less tied to specific investments or insurance products.
Transparent pricing: Fees are typically based on AUM, hourly rates or flat fees, making it easier to understand what you’re paying for.

Cons of Fee-Only Financial Planners

Higher upfront costs: Without commissions to supplement income, fee-only advisors may charge more for financial planning or investment management.
Limited product access: They may not offer in-house insurance or brokerage services, potentially requiring you to work with additional professionals for certain products.
Less bundled service: If you need help executing trades or buying insurance, those tasks may fall outside their service scope and require third-party coordination.

What Fees Do Fee-Only Financial Planners Charge?

A fee-only financial planner sits down to discuss retirement planning with clients.

Fee-only financial advisors most commonly charge based on AUM, using a tiered or graduated structure. Rates typically start at around 1% annually for portfolios up to $1 million, then decrease as assets rise—often dropping to 0.5% or less for portfolios over $5 million.

These advisors often bundle planning services into their AUM fees, though some charge separately to better reflect the depth of ongoing advice provided.

Beyond AUM-based pricing, fee-only advisors also offer flat-fee arrangements. Subscription fees now average about $4,500 annually, particularly among advice-only planners focused on comprehensive planning rather than investment management, according to the 2024 Kitces Report.

The same analysis—which was based on a survey of 621 advisors—found that hourly fees have a median rate of $300, while project-based financial plans typically cost around $3,000 depending on complexity. These models offer flexibility for clients who need targeted advice without committing to a full-time advisory relationship.

Fee-Only vs. Fee-Based Financial Advisors

Fee-only financial advisors are just one type of advisor you can work with. The other is called a fee-based financial advisor. While the term “fee-based” is often confused with fee-only, fee-based advisors operate much differently. The table below breaks down some key differences:

Financial Advisors: Fee-Only vs. Fee-Based

Fee-Only Financial Advisors	Fee-Based Financial Advisors
Clients typically pay directly for services, and advisors cannot make money from commissions.	Clients typically pay directly, but advisors can get additional commission-based compensation.
Advisors always have a fiduciary duty to put the financial interests of their clients first.	When initiating certain financial transactions and product sales, advisors must follow Regulation Best Interest, not fiduciary duty.

A fee-based advisor will receive normal advisory fees from clients, just like a fee-only advisor. However, product- and referral-based commissions can be earned on top of advisory fees. In many cases, these commissions come from the advisor’s role as either a representative of a broker-dealer or an insurance agent.

What Standard of Conduct Do Fee-Based Advisors Follow?

Fee-based advisors may operate under different standards of conduct depending on how they’re registered and what services they provide. Those acting as RIAs are bound by a fiduciary duty, which legally requires them to act in their clients’ best interest at all times. This includes placing the client’s needs above their own, avoiding conflicts of interest, and providing full disclosure when conflicts exist.

However, fee-based advisors who also operate as registered representatives of broker-dealers may follow the Regulation Best Interest (Reg BI) standard when selling investment products. Reg BI requires them to recommend investments that are in a client’s best interest at the time of the recommendation and to disclose conflicts—but it does not impose the ongoing fiduciary obligation that applies to RIAs.

Before Reg BI, these representatives were only required to meet the suitability standard, which simply required that recommendations be appropriate for the client’s general financial profile. Unlike fiduciary duty, it allowed advisors to recommend higher-cost products if they were still considered “suitable.”

Because fee-based advisors can operate under multiple hats, it’s possible for them to switch between standards depending on the capacity in which they’re acting—something clients should understand when receiving advice.

What Types of Compensation Do All Financial Advisors Receive?

Financial advisors typically receive payment directly from their clients. But depending on the service, their compensation can vary. You can generally break down financial advisor fees into three categories:

Financial Advisors: Types of Compensation

Asset Management Fees	Most advisors charge a fee for investment management services, which is often based on a percentage of the value of the assets they manage. These fees could be charged quarterly, and percentages could be lower depending on how much you have invested. Some advisors may also charge performance fees when they exceed a return benchmark for their clients.
Financial Planning Fees	Advisors usually charge an additional hourly fee or flat fee that’s based on the cost of engagement for financial planning and consultant services. These are available as a standalone service or alongside investment management services that come with fees as a percentage of assets.
Commissions	Some advisors make money on the side with commissions, but clients aren’t responsible for paying these. Brokers and dealers compensate certain advisors when they sell a financial product like an annuity, or buy and sell mutual funds or other financial products for clients. As we noted above, fee-only advisors don’t receive sales commissions; fee-based advisors do.

No matter which type of financial advisor you work with, you should always know how much they will charge you. Understanding how advisors make money will also help you identify any potential conflicts of interest that could undermine your investments.

How to Find and Vet Fee-Only Financial Advisors

Besides asking your colleagues, friends and family for recommendations, you can also take the automated route to find an advisor. For example, SmartAsset offers a free financial advisor matching tool that you can use to find advisors who serve your area, though it includes both fee-only and fee-based financial advisors. It will connect you with up to three advisors, with the final choice of who to work with being up to you.

Here are some other places to look for an advisor:

Resources to Find Fee-Only Financial Advisors

National Association of Personal Financial Advisors (NAPFA)	You can use NAPFA’s online search tool to find a local and experienced fee-only advisor. To become a NAPFA-registered financial advisor, advisors need experience and fiduciary duty. All NAPFA-registered financial advisors operate on a fee-only basis.
Certified Financial Planner™ (CFP®) Board	The CFP® Board also has a directory of planners with advisory qualifications. Being a CFP® doesn’t assure fee-only service, but it does guarantee educated, experienced and ethical advisors.
Garrett Planning Network (GPN)	This fee-only planner organization connects you with advisors that charge at an hourly rate. Due to the overlap of company missions, some GPN members may be a member of NAPFA, as well.

Once you’ve narrowed down your list of potential advisors and planners, do your homework to find the best fit. Try to set up an initial meeting so you can ask key questions of your potential advisor. Ask about their experience, education, any criminal background, their specialty, their services and anything else you find relevant.

Bottom Line

A woman meeting with fee-only financial planners to see if their firm would be a good fit.

Before you overwhelm yourself with your financial planner search, it’s a good idea to start with fee-only planners. That way, you have a guarantee the advisors you begin with will already have a fiduciary responsibility. You also know that they won’t have any incentives to sell you a product or service for their gain. However, if you know that you’d rather work with other advisors based on your situation then keep in mind that it’s a very individualized choice.

Tips for Choosing a Financial Advisor

A financial advisor can offer valuable insights into a broad range of matters, including comprehensive financial planning services, retirement planning, estate planning and investing. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
Before looking for an advisor, determine what it is you want from an advisor. Are you ready to get into investing yourself, or do you want the advisor to manage your investments for you? Do you need help creating a financial plan?

Next Steps

Do you want to learn more about financial advisors? Check out these articles: