Why Fee Only

Fee-Only means you get unbiased advice.

You have the choice of working with advisors who get compensated by commissions; a combination of fees and commissions, often called fee based; or somebody who earns only the fees you pay them. Everybody has to get paid for their work, so what’s the big difference? There are many reasons why a fee-only relationship with your financial adviser may work best for you.

We believe the fee only approach is best for most people who are looking for unbiased independent advice. In any type of commission relationship the potential for conflicts of interest between you and your adviser is high. There are actually two separate issues to understand.

Salesperson or adviser - There is a difference. If the person you are working with is a registered representative for an insurance company or broker ,they are really a financial salesperson. Just like a car dealer, they are paid to sell you a product within their recommended list and may be influenced by the amount of commission they will earn on each product. As a registered representative they are paid by their employer instead of by you,  so they are required to represent their employer and consider their best interests before yours. Additionally, their company may have revenue sharing relationships with certain product groups like mutual fund families that influence their product recommendations to you. Interestingly, they are not even required to tell you if there is a conflict of interest between the two of you. With all that, how confident can you be that the advice you are receiving is in your best interest and not theirs?

Rodgers & Associates is a Registered Investment Adviser. As a Registered Investment Adviser, we have a legal obligation to our client to always put their interests before ours. We act as a fiduciary for our clients at all times. If there are any conflicts either real or potential between us and our clients, we are required to disclose them. To learn more about the differences between Registered Representatives and Registered Investment Advisers read the TD Ameritrade white paper on Understanding Financial Advice.

The second issue is how your adviser gets paid. We earn a fee for our advisory services that is paid directly by you. There are no commissions paid by you to Rodgers & Associates nor is there  any other compensation earned by us. Our only allegiance is to our clients. We avoid relationships with any product provider so we cannot be influenced by them. No arrangement can be totally free of conflicts, but a fee only relationship eliminates many of the ones that get in the way of providing unbiased advice. TD Ameritrade commissioned a study a few years ago and the results were that if consumers understood the differences, they would choose to work with a fiduciary by a very large margin. To see the study click here. For more information on a fee only relationship please visit the National Association of Personal Financial Advisors website at www.napfa.org. Don't be afraid to ask your adviser or one you are considering if he or she is acting as a fiduciary for you.