How advisors get paid
| Model | How the advisor is paid | Main thing to watch |
|---|---|---|
| Fee-only | Only by client fees: a percentage of assets, a flat fee, or hourly | Make sure you get enough service for the fee |
| Fee-based | Client fees, plus possible commissions on some products | Know when a commission applies, and ask |
| Commission-based | Commissions on the products they sell | Advice can be tied to what pays the advisor |
Fee-only advisors
Fee-only advisors are typically registered investment advisers who hold no brokerage or insurance license. Because they can’t earn commissions, product sales can’t influence their pay.
The tradeoff is access. Some products, like certain insurance policies and some alternative investments, are generally sold on a commission basis. Fee-only clients often have to buy those elsewhere.
Fee-based advisors
Fee-based advisors charge advisory fees for planning and investment management. They may also earn commissions on certain products, such as insurance or, through a broker-dealer, some investments.
Done well, this means one advisor can handle more of your financial life. The responsibility that comes with it is disclosure: you should know in advance when a recommendation would pay the advisor anything beyond your fee.
Where Rubiq fits
We’re a fee-based firm. Here’s what that means for you.
- Advice and investment management are provided through Wealthcare Capital Partners, an SEC-registered investment adviser, and paid for through the fees on our fee page. In that advisory relationship, we act as a fiduciary.
- Insurance is the exception. Rubiq provides advice on insurance products and may earn a fee from placing funds with life insurance companies. That’s a conflict of interest we disclose, and you’re never obligated to buy insurance through us.
- Every fee is disclosed in writing before you sign, in our Form ADV and client agreement.
Frequently asked questions
What is the difference between a fee-only and a fee-based financial advisor?
A fee-only advisor is paid only by clients, through a percentage of assets, a flat fee or an hourly rate. A fee-based advisor also charges client fees but may earn commissions on certain products, such as insurance.
Is a fee-only advisor better than a fee-based advisor?
Not automatically. Both models can serve clients well. What matters is knowing how your advisor is paid, whether they act as a fiduciary, and that every source of compensation is disclosed to you in writing.
Is Rubiq Financial Partners fee-only or fee-based?
Rubiq is fee-based. Advice and investment management are paid for through our advisory fees. Rubiq provides advice on insurance products and may earn a fee from placing funds with life insurance companies, a conflict of interest we disclose.