When deciding on a financial advisor to handle investments, it is important to understand how they are compensated. Knowing how an advisor is paid can help you understand the recommendations they make for clients.
There are two ways in which financial firms make money: a sales model (ex. Fee-based, commission, or any combination of things) or fee-only model.
First let’s look at the sales model. This method of paying for services is where the client pays for a product and an advisor gets paid a percentage of any products sold. Those products can include mutual funds, annuities, and insurance, among others.
Many of the larger financial firms use this model to pay their employees.
Now let’s examine a fee-only model. This method is where a client pays the advisor directly for advice. Financial advisors using this method do not sell products and instead do what is in the best interest of the client all the time.

Image courtesy of Watson CPA Group https://www.watsoncpagroup.com/fee-only-financial-planner/
“The big difference between the two is fee-only means you are only receiving compensation from a client, not on what you can buy or sell or recommend,” said James Ferguson, Managing Partner and Certified Financial Planner for Roan Capital Partners. “With fee-based, you are only compensated on what you can sell. We’re not here to sell products, that’s not what we do. We are here to offer expertise.”
According to the National Association of Personal Financial Advisors, fee-only is the most transparent and objective method of financial advice available. The fee-only model ensures financial planners work as a fiduciary.
A fiduciary is considered the highest legal duty of one party to another because it requires being bound ethically to act in the other’s best interests, according to Investopedia. Using a fee-only model allows financial advisors to act as a fiduciary all the time.
Roan Capital Partners opened as the region’s first NAPFA certified fee-only financial advisory firm in 2018. Ferguson and Managing Partner Joy Garland decided to go the fee-only route to build lasting relationships with clients.
Ferguson and Garland have both been part of the sales-based model. They saw gaps and issues while they were working in the industry but couldn’t do much about it.
Until they decided to open Roan Capital Partners.
“I wanted to be in a fee-only business because of the fiduciary status we take on,” Garland said. “Not only should we be doing the right things for our clients, we have to. I didn’t want to go to any other platform where commissions are involved.”
Roan Capital not only takes care of their client’s financial needs, but they also help take care of their clients. They’ve helped clients purchase cars and even helped out with pets.
So how does fee-only work?
Ferguson said there are a couple of ways his firm gets paid. A client will pay for advice by the hour or per project. This is a great option for individuals who enjoy handling their financial needs themselves.
Another option is for Roan Capital Partners to handle all a client’s finances and take a small percentage from the managed assets on a quarterly basis. Either way, the client is directly compensating the financial advisor for their expertise.
“We only want to do things when we think it is in the best interest of the client and when we think it’s going to help them,” Ferguson said. “We’re not doing things to hit a monthly metric. None of that applies here. We’re only paid by the client. We take that very seriously.”
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