The Key Advantages of Working With A Fee-Only Financial Planner

Choosing the right financial advisor can mean the difference between achieving your retirement goals or falling short. Not all financial planners are created equal, and when seeking help with your long-term financial objectives, it's important to understand the different types of financial advisors: brokers, fee-based advisors, and fee-only financial planners. We believe a fee-only Certified Financial Planner is vital for staying on top of your finances.

Understanding the Landscape: Fee-Only Advisors vs. Fee-Based vs. Commission-Based

Before exploring the benefits, it’s essential to understand the difference between the three main types:

Commission-Based Brokers: These planners receive a commission for every financial product sold. This compensation structure creates an inherent conflict of interest, as they can be considered salespeople for the company they’re affiliated with.
Fee-Based Advisors: These advisors can receive both fee compensation (based on assets under management) and commission compensation from the sale of products. It can be hard for the average consumer to know which standard of care their fee-based advisor is operating under.
Fee-Only Financial Planners: A fee-only planner works independently and does not sell financial products. They are paid a set rate for their services, typically a percentage of assets under management or a flat annual fee. They are always and only working in your best interest.

All Fiduciary. All the Time.

The fee-only fiduciary standard is the highest standard of care in the financial services industry.

A Fee-Only Planner Always Works in Your Best Interest: Fee-only financial planners are personally liable if they give you bad advice, so they are legally obligated to act in your best interest. This is a much higher standard than the conflict of interest landmines found with fee-based advisors.
Highest Ethical Standards: They are expected to conform to the highest legal and ethical standards and never have a conflict of interest from commission compensation.
Recourse and Protection: This legal framework provides you with recourse if you believe your advisor has failed to meet their fiduciary obligations, creating an additional layer of protection for your financial interests. Fee-only advisors need hide behind the suitability standard of care.

Comprehensive Financial Planning – Connecting All the Dots

A fee-only planner evaluates your entire financial situation—including income, expenses, assets, liabilities, taxes, and long-term goals—to help you create a comprehensive plan of action. With an on-going engagement they review and update your plan as needed.

Holistic View: They consider how different aspects of your financial life interconnect, such as how your insurance coverage relates to your estate planning goals, or how your investment strategy impacts your tax planning.
In-Depth Analysis: This involves an extensive financial discovery process that examines your current cash flow, debt, investments, tax situation, and future financial objectives.
Broad Advice: You'll get advice about your insurance, estate, and retirement planning, without an agenda or conflicts associated with commission-based brokers who may sell you products that are not applicable to your situation.

Investment Recommendations Based on Merit

Because fee-only planners don’t receive commissions, they can recommend investments based purely on merit and what’s ideally suited for your situation.

Lower Costs, Better Returns: This objectivity typically results in lower-cost investment options, such as index funds and ETFs. This can significantly improve your long-term returns by reducing fees and expenses that erode investment performance over time.
No Product Incentives: They're not incentivized to steer you toward high-commission products or proprietary investment funds.
Objective Research: The absence of commission incentives enables objective investment research across the entire universe of available investment options.

Cost Transparency and Clarity

With a fee-only model, you know exactly what you’re paying for financial advice.

Full Fee Disclosure: Fees are disclosed upfront and typically structured as a percentage of assets under management, hourly rates, or flat annual fees.
Hidden Costs Eliminated: This transparency contrasts sharply with commission-based models where the true cost is often hidden in product fees and ongoing commissions.
Aligned Interests: Your advisor’s compensation grows only when your wealth grows, creating a natural alignment between your interests and theirs.

Professional Certification and Credentials

Most fee-only financial planners have professional affiliations.

Rigorous Training: Fee-only financial planners who have the CFP® certification go through rigorous training on investments, insurance, retirement planning, tax planning, and estate planning. The CFP® designation is widely considered the "gold-standard" of financial advisor designations.
High Standards: CFP® professionals complete extensive education, examination, and experience requirements, along with adherence to strict ethical guidelines.
Commitment to Excellence: The path to becoming a CFP® professional requires completing a comprehensive curriculum and passing a rigorous 6-hour examination.
NAPFA Membership: This professional accountability extends to membership in organizations like the National Association of Personal Financial Advisors (NAPFA), which requires fee-only compensation, adherence to strict fiduciary standards and more robust continuing education than the CFP Board. Ark Royal Wealth Management principals Mike Palmer, CFP® and Zach Palmer, CFP® are both members of NAPFA.

On-Going Financial Guidance and Advice ️

Fee-only relationships are typically ongoing rather than transactional. This is critically important because as your life changes, so too does your financial plan.

Long-Term Partnership: Your planner serves as a long-term trusted partner who’s available throughout the year to answer questions, address concerns, and adjust your plan as your life circumstances change.
Plan Continuity: This continuity ensures your financial strategy remains relevant and effective over time, especially when facing major life events like a career transition, inheritance, or divorce.
Proactive Monitoring: They proactively monitor changes in tax laws, market conditions, and financial regulations that might impact your plan

Holistic Wealth Management

Fee-only financial planners can provide you with total wealth management services.

Integrated Approach: They cover all areas of financial planning, including your retirement planning, estate planning, investment planning, tax planning, and risk management. This ensures all components of your financial plan work together efficiently toward your objectives.
Sophisticated Strategies: Their investment management services often include sophisticated portfolio construction using modern portfolio theory, and their tax planning involves year-round strategies to minimize your lifetime tax burden, such as Roth conversion analysis.
Coordination: Fee-only planners coordinate with your other professional advisors, including CPAs, attorneys, and insurance professionals, to ensure all recommendations are aligned and optimized.

Ark Royal Wealth Management - Your Fee-Only Fiduciary Partner

When choosing the right financial advisor, partnering with a certified fee-only financial planner helps ensure they will customize a realistic plan according to your specific financial position and objectives.

If you’re looking for a fee-only certified financial planner in Raleigh, Charlotte, or anywhere throughout the Carolinas Ark Royal Wealth Management is here to help! We provide comprehensive and objective financial planning and fiduciary investment management advice to our clients. We always and only act in your best interest.

Get in touch with us today to schedule a complimentary consultation!