Why More Advisors Aren’t Fee Only

This day and age, you see an increasing number of Advisors who are Fee-Only, but there are still many out there who are not.  There are quite a few reasons why some Advisors still have not accepted this method of compensation.  One could only assume the main reason is personal income.  By being Commission-Only or Fee-Based, an Advisor could generate a lot more revenue off of one client than being a Fee-Only Advisor.  Commissions always end up being higher than flat management fees.  Their advice to the client is mostly driven by the sales goals they must attain. 

Majority of the advisors that work for big brokerage firms such as Merrill Lynch and Goldman Sachs have little control over the management they provide for the client.  These big firms have management guidelines the advisors must abide by.  The advisors also have to follow the company’s fee schedule.  These big brokerage firms usually do not follow the Fee-Only compensation method.