Why Fee-Only Financial Planning Matters

From The Wall Street Journal:

Consider that of the roughly 295,000 professionals in the U.S. who offer clients financial advice, fewer than 2% are fee-only advisors who follow a true fiduciary standard that prohibits commissions on products recommended to clients and legally requires the advisers to always put their clients’ interests first.

When I started out in the industry at a boutique Wall Street firm, my role was to cold call potential clients and pitch them a hot stock. The idea was to get them to purchase stock from me and I would collect a commission for every buy and sell. You might be aware of these types of jobs, from the wall street movies or maybe you have gotten calls like that before.

In my mind there was nothing wrong with what I as doing but I was in a transactional business model. Clients were happy with that type of service but I began to realize that most of clients viewed me and my colleagues as figure from the movies who were bustling around the Stock exchange floor throwing tickets into the crowd of traders. Was I next to the New York Stock Exchange? Yes. But was I making much of an impact? What was getting me out of bed? The truth is that it was the fun of collecting of leads and the thrill of closing a deal. The monetary reward was all the reward I needed at the time. Of course, I was in my mid twenties and fresh into the industry.

After awhile it became harder and harder to stay focused on my mission because I did not have much of a mission. I was the side dish at the dinner table for most of my clients. I was like a really good side salad. If I did great, it made their thanksgiving dinner slightly better and if I didn't they would just forget about the salad that year.

When I got introduced to holistic Financial Planning I began to look at clients' financial lives as a whole picture I began to open the conversation up with them in ways I could of never have imagined.

Fast forward 5 years and I had attained my CFP designation and a few more years under my belt. I was able to understand how different components of a client's life affected another piece. It became clear that they are all interrelated. The social security strategy affects the withdrawal strategy. The withdrawal strategy affects the tax strategy. The tax strategy affects the savings rate. The savings rate affects the long-term care strategy. The long-term care strategy affects the estate plan. The estate plan affects relationships within the family.

At the time, I was doing financial planning but I was still in the broker dealer world and began to realize how I was still selling products and not providing true holistic financial advice held to a fiduciary standard. It was at this time that I began to look into what a Fee-only Fiduciary Planner was and why it was different than what I was doing. In a nutshell, Fee-Only Financial Fiduciary Planners follow this criteria:

Fee-Only

No insurance or annuity sales. Period. Fee-Only advisors are paid only by you, the client, and never make commission.

Fiduciary

Under oath and law to put your best interest first at all times. This is the highest legal and ethical standard for financial advisors.

Independent

Not affiliated with any life insurance company, annuity product, bank, or brokerage house.

I then made the decision to work as a Fee-Only Fiduciary Planner and worked with hundreds of families to build and preserve their financial plans. I no longer was selling products for commissions and was instead looking to improve my client's financial picture. It was like going from being a doctor that was told what I should prescribe to patients by the parent company and instead was able to make recommendations on what to prescribe with little to no influence from an external force.

Fast forward to 10+ years in the industry, the results have been far better that I could of expected. I went from the being asked to make the side dish at the dinner table to instead being asked to cook the whole meal and have each dish complement each other.

So why does Fee-Only Planning matter?

At its core, Fee-Only planning is about aligning our incentives with our clients' best interests.

Rather than focusing on isolated transactions, we take a comprehensive view—helping people manage every aspect of their financial life in an integrated, thoughtful way. Real financial planning goes beyond just managing investments. It's about understanding the full picture.

The typical approach is to charge a percentage of assets under management, reflecting a commitment to ongoing, full-service wealth management. However, Fee-Only also means flexibility. Depending on your needs, services may be offered through flat fees, hourly fees or project fees - always transparent, with no hidden agendas.

For clients under our management, we intentionally avoid charging hourly fees or doing project fees. We want to encourage open communication—clients shouldn’t feel like the clock is ticking every time they reach out. I also know many Fee-Only Planners that do offer, hourly or project based fee structures and their clients see a lot of value in that.

Perhaps most importantly, Fee-Only planners avoid commissions, product sales, and restrictive contracts. There are no surrender charges, lock-ins, or financial barriers. If we’re not delivering value, you’re free to walk away. That’s the level of accountability we believe you deserve.

So why do I wake up in the morning?

I wake up with purpose of empowering people to take charge of their financial lives. Instead of people being told what to do by people tied to large institutions who want to sell them their products, I envision a world where everyone is armed with the education to challenge these institutions as to whether they need their products or not. Giving people the power to make informed decisions on their financial lives is incredibly rewarding. Everyday I wake up as a business owner with the responsibility of carrying out my company's mission:

Everything we do is to raise the standards of Retirement Planning. We believe in thinking beyond just investments. The way we strive to raise the standards of Retirement planning is by designing our clients' financial plans in a way that is acutely tuned towards their specific goals and helping them execute their plans in simple, actionable steps.

And we happen to manage their investments and monitor their plans.

I can see that picture in my head and I have a high degree of confidence that the world will be a much better place. No longer would people be sold products that address one part of their plan at the expense of other parts of their plan. Advisors would have to recommend what is in the client's best interest and do the work of educating their clients on why that best suits their plan and at least open the discussion to collaborate with the client on a decision they make together. I have discovered my mission with crystal clear vision and wake up every morning knowing that I have the opportunity to do my part to help push the world towards it.

About The Author

Marc Lowe is the Founder & President of In The Money Retirement Planning. He is a Certified Financial Planner and member of NAPFA National Association of Personal Financial Advisors, XY Planning Network & Fee-Only Network. He works with retirees and those approaching retirement. He has over a decade of experience helping these folks grow their net worth, organize their finances and build better lives for themselves and their families.

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