Fee-Only + Fiduciary

What does ‘Fee-Only’ mean?

This term refers to the method of compensation for the financial planner. ‘Fee-Only’ planners are compensated solely by fees paid by their clients and do not accept commissions or compensation from any other source. ‘Fee-Only’ planners believe there is a significant conflict of interest if an advisor stands to gain financially from the purchase of any product he or she recommends to the client.

What does ‘fiduciary’ mean?

This term fiduciary refers to the legal requirement held by some professionals like financial planners to always act in the best interest of clients. Fiduciary financial planners must avoid or disclose all conflicts of interest and recommend the ideal financial products for a client’s specific situation.

Non-fiduciary financial advisors like stockbrokers must only recommend suitable financial products and may receive commissions for those recommendations from fund managers and other entities. We believe this is an inherent conflict of interest that results that can result in undesired results for clients.

As fiduciaries, financial planners can help ensure that greater care and attention is given to each client, and clients can better trust the recommendations from their advisors.

What other forms of compensation are used by financial planners?

Some planners are compensated entirely by commissions from the providers of products they recommend and sell. Others referred to as fee-based or fee-offset, charge both a fee and receive commissions from selling products. These compensation methods have embedded conflicts of interest.

Coastal Financial Advisors provides comprehensive financial and investment planning for a fee and receives no commission from the purchase or sale of products. As fiduciaries, we are also legally required to avoid or disclose all conflicts of interest.

We decided on this fee-only fiduciary model because we believe it is the best model for providing financial advice for clients as it aligns the interests of the financial planner with the interests of their clients.

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