What does Fee-Only mean? What about Fee-based? How do you make money?

Fee-only means no commissions. Our only source of income is fees agreed to by our clients.

Fee-based is a term made up by commissioned salespeople to sow confusion - and it worked! Because it sounds like Fee-only, lots of people come into our first meeting asking if I am Fee-based. But Fee-based does NOT mean that their income is “based” only on fees their clients pay. Fee-based advisors make money from fees AND commissions on products they sell AND often get compensated by third parties such as mutual fund companies and other parties that they are intermediaries for, AND their firm may receive other income that they use to incentivize their advisors with sales contests to favor certain products. These multiple sources of income from people other than the client create massive conflicts of interest and are almost always hidden from the client.

At Your Best Path, we collect two types of fees, and clients pay us one or the other, never both. Option 1: for clients who delegate asset management to us, we charge a percentage of assets managed, commonly called an AUM fee. Option 2: a fee for service on the number of hours we work on your plan, just like a lawyer, CPA, or consultant would charge.