How do financial advisors charge, and how do I?
Three ways, broadly. Fee-only means you pay the advisor directly, as a flat fee, an hourly rate, or a percentage of what they manage. Fee-based means fees plus commissions on some products. Commission means the product provider pays, so there is no invoice to you. Each has trade-offs and none is automatically the honest one. What matters is that you are told which applies before you ask, and that anyone advising you can explain what they earn on what they recommend.
Ask the question early, and ask it plainly
The most useful thing you can do at the start of any financial conversation is ask how the person opposite is paid on whatever they are about to recommend. Not as a challenge. As a normal question, the way you would ask a builder whether a quote includes materials.
A good advisor answers it in one sentence without shifting in their seat. That reaction tells you as much as the answer.
The three arrangements
| Model | Who pays | The trade-off |
|---|---|---|
| Fee-only | You do, as a flat fee, hourly rate, or a percentage of assets managed. | No product commission in the picture. But advice on insurance often gets referred out, and someone still earns a commission wherever it lands. |
| Fee-based | You pay fees, and the advisor can also earn commissions on some products. | Broader range of things they can actually help with. Requires clear disclosure of which hat is on at which moment. |
| Commission | The product provider pays, so nothing is invoiced to you. | No fee to write a cheque for, which some people prefer. The conflict is that different products pay differently, so it needs to be disclosed. |
None of these is automatically the honest one
There is a fashionable argument that fee-only is the only clean model. It is a reasonable preference and it is not the whole picture.
Insurance is almost entirely distributed on commission. An advisor who refuses commission entirely is an advisor who cannot place your life insurance, which means either you go elsewhere for it or it does not get done. That is a real cost, and it is usually paid by the person who needed the coverage.
Equally, commission creates a genuine conflict, because products pay differently. That is not an accusation, it is a fact about the structure, and the answer is disclosure rather than pretending otherwise.
The question people do not know to ask
Here is one worth carrying: are you acting in a fiduciary capacity in this particular conversation?
Many advisors, including me, are dually registered. Securities and investment advisory services are offered through LifeMark Securities Corp., and insurance is placed separately. Those are different roles with different standards attached, and the honest answer is that the capacity depends on what we are discussing rather than being one fixed label that covers everything.
Anyone who tells you they are your fiduciary in every interaction, while also selling insurance, is describing something simpler than the truth.
How we do it
All three, depending on the work, and we say which before you ask.
Securities and investment advisory services go through LifeMark Securities Corp., with the compensation arrangement disclosed for that account. Insurance is placed on commission paid by the carrier, which is how essentially all insurance works. Business consulting is billed directly by Impact.
There is no minimum-asset wall. The first conversation is free. Sometimes the outcome is ongoing advice and sometimes it is one coverage fix and a handshake, and we would rather tell you it is the second than manufacture the first.
Where we fit
We lay the options against your goals and talk through the trade-offs until you can weigh them yourself. You make the decisions. We do the legwork.
This is general education, not investment, tax or legal advice, and not a recommendation. It contains no projection or estimate of future results. Investing involves risk, including possible loss of principal. Securities and investment advisory services are offered through LifeMark Securities Corp., Member FINRA/SIPC.
While we are on the subject.
What is the difference between fee-only and fee-based?
Fee-only means the advisor is paid by you alone. Fee-based means they charge fees and can also earn commissions on certain products. The words are one letter apart and the arrangements are meaningfully different, which is why it is worth asking directly rather than inferring.
Is commission automatically worse for me?
No, but it does create a conflict that should be disclosed. Some products, particularly insurance, are almost always distributed on commission, so refusing to work with commission would mean refusing to place coverage at all. What matters is that the conflict is named rather than hidden.
What should I ask before taking advice?
Three questions. How are you paid on what you are recommending to me. Do you earn more on one option than another. And are you acting in a fiduciary capacity in this particular conversation, because a dually registered person is not in every one.
Do I need a minimum amount to work with an advisor?
Not with us. There is no minimum-asset wall here. The first conversation is free, and the plan itself decides what makes sense. Sometimes that is ongoing advice and sometimes it is a single coverage fix.
How does Impact Solution Services get paid?
Both ways, depending on what the work is. Securities and investment advisory services are offered through LifeMark Securities Corp. and carry the compensation arrangement disclosed for that account. Insurance is placed on commission paid by the carrier. Business consulting is billed directly. We will tell you which applies in the first conversation, before you ask.
Bring us the version of this question that is actually yours.
The first conversation is free, and it stays in plain English.
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