What It Means to Work with a Fee-Only, Fiduciary, CFP® Financial Advisor

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Please note the publish date of this blog. Financial information, market conditions, and other data mentioned in this post may no longer be accurate or relevant.

Searching for a financial advisor can be intimidating, and there are several important factors to consider when choosing a financial advisor

The right advisor for you will have some distinguishing characteristics – they’ll meet you where you’re at in life, offer support and guidance, and thoughtfully tailor a comprehensive plan that helps you forge a path for your future, whether you’re just starting your career or nearing retirement.

By taking time to do your own research, you are more likely to find an advisor who can help you achieve your personal and financial goals. 

An essential part of the research process is knowing the right questions to ask. The following questions will allow you to thoroughly evaluate a potential advisor when meeting them for the first time:

  • What strategies will you employ to help me meet my financial goals?
  • How will you ensure my finances are balanced and protected?
  • Do you recieve any kickbacks or commissions for the products you recommend?
  • How do you ensure you will act with transparency and objectivity?
  • How will you make my financial portfolio as tax-efficient as possible?

Beyond asking the right questions, knowing some key financial advisor vocabulary will help you find the ideal financial support system. 

In your search for a financial advisor, you’ll likely come across specific terminology and designations. Pay attention to these terms because they can give you more information about your potential financial advisor. 

Here are a few of the most important terms to know as you’re looking for the right person to help you manage your money. 

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What is a CFP® Professional?

A CERTIFIED FINANCIAL PLANNER™ is a professional designation awarded to financial advisors who have passed coursework and an exam to prove their knowledge in all areas of financial planning. 

CFP® professionals are formally recognized experts in taxes, insurance, investment, retirement, and a breadth of other financial topics, which positions them to guide clients through every area of their financial lives.

Forbes reports that CFP® professionals must undergo 4,000 to 6,000 hours of training, ensuring they are thoroughly versed in all financial matters. 

CFP® professionals can also have specializations such as estate planning or tax planning. Regardless, all are experts in walking you through your comprehensive financial journey and offer the tools and expertise to help you achieve your goals. 

Some financial goals a CFP® professional can help you achieve are:

  • Creating a diversified investment portfolio
  • Preparing for a successful retirement
  • Increasing your net worth
  • Making a debt repayment plan
  • Saving for your children’s college
  • Protecting your wealth with the right insurance coverage
  • Maximizing your money with a proactive tax plan
  • Building an estate plan that embodies your legacy
  • Encouraging you to use your money to live the life you love

In addition to financial excellence, CFP® professionals are bound by a strict code of ethics and operation. They must act in their clients’ best interest, which lays a foundation of trust from the first meeting through critical life transitions like marriage, children, and retirement.

There are countless other financial situations a CFP® professional can walk you through. Ultimately, they help bring organization, planning, and clarity to your finances and help you take agency over your financial wellbeing. 


There’s a constant flow of information in our world, and it’s hard to know who to trust. Self-help books, popular news media, and self-proclaimed financial gurus all offer their own views on how you can best shepherd your finances. 

Most in the USA don’t work with any kind of financial advisor – certified or not. A Statista survey found that only 38% Americans worked with a financial advisor in 2020. This means more than half of US adults are missing out on the opportunity to get expert advice that could completely transform their future.

That said, it’s important to be cautious when choosing someone to help guide your finances. Because there are so many financial designations with different meanings, it can be confusing when trying to decide which is best for your needs.  

Here are some highlights on what sets CFP® professionals apart.

CFP® professionals must be highly financially literate and can help you improve your financial literacy to make wise choices with your money. Some essential financial areas they can help you understand include:

  • Net worth and its importance
  • The benefits of compound interest
  • How to borrow wisely
  • Using credit to your advantage
  • Best practices for creating and maintaining a well-diversified portfolio
  • How to use your money in ways that will also enrich your inner life

A CFP® professional is like a doctor for your money, helping you evaluate your finances honestly and create realistic and actionable goals. The best CFP® professionals will support you and your values, be transparent and straightforward, and ensure you have a well-balanced, tax-advantaged portfolio.

What is a Fee-only and Fiduciary Financial Advisor?

Beyond expertise, we all value honesty, especially in an area as personal and meaningful as finances. It’s crucial to trust your financial advisor since they will be a part of some of the most important decisions you make – decisions that will impact your retirement and your family’s future.

CFP® professionals act as a fiduciary, meaning they are legally required to act in your best interest. All CFP® professionals are held to a strict fiduciary duty and must put their client’s best interests before their own. In other words, they can only make financial recommendations that benefit their clients.

Before you agree to work with an advisor, you must know how they are paid. In general, there are three broad fee structures:

  • Fee-only
  • Fee-based
  • Commission

What does each mean?

Advisors who employ a fee-only structure are paid directly by their clients and only by their clients. This means they don’t receive kickbacks, referrals, or commission income from the products or strategies they recommend. 

On the other hand, fee-based advisors may receive compensation both ways – from their clients and commissions.

Finally, commission-based fee structures indicate that the professional gets paid through commissions. 

Businesswire reports that, of US adults who work with a financial professional, only 50% of investors are certain their financial advisor is a fiduciary. This means that half of those working with a financial professional are unsure if their advisor is acting in their best interests.

The best way to ensure you’re working with a fiduciary?


You can also be diligent and get it in writing. Many firms, including Abacus, will make their fiduciary commitment clear to you in writing, protecting you legally and mitigating any risk of your advisor compromising their ethical or legal standards.

It’s essential that your potential advisor is honest and transparent about their fee structure – no matter what it is – so you know exactly what you’re paying for up front. 

At Abacus, all of our advisors operate on a fee-only basis and we only operate with complete transparency with your best interests in mind. We know how much emotional energy goes into planning for your financial future, whether it’s retirement planning, real estate decisions, rebalancing your portfolio, or repaying debt. Our integrity is a key pillar the company was built on so that we can help you build what’s most important to you. 

Why Should I Work with a Fee-only Financial Advisor?

Abacus is equally passionate about working on a fee-only basis and are transparent about our fees. We believe this sets our clients and advisors up for success by structuring payments in this manner.

Keep in mind that two separate legal standards govern the practices of financial professionals:

  • Fiduciary Standard. This standard protects the client and applies to all Certified Financial Planners™. The standard requires that any person compensated for giving financial advice must act in their client’s best interest. 
  • Suitability Standard. This less-stringent standard applies to brokers selling you a service or investment opportunity that also gives them a financial reward. Their actions must suit your needs, but not necessarily your best interests. This creates a lot of gray areas, which can be confusing for consumers.

Above all, your potential advisor should be open, honest, and transparent about their fees and operation. If they cannot clearly state what standards they are following or what their fee structure is, that is a significant red flag.

Finding the Right Fit for You

Abacus loves being fee-only because, as fiduciaries, we’re legally and ethically required to act in your best interest at all times. The clarity and integrity we bring to our mission of helping you expand what’s possible with your money is why we get up in the morning to serve our clients.

There’s also nothing better than proven, evidence-based investment strategies. Connecting your money to your ideal life and future goals is simpler when you work with someone who has no ulterior motives.

Finding an advisor you can trust is one of the most exciting and rewarding experiences in the financial world. After all, you are inviting them to guide you through one of the most complicated aspects of life – caring for you and your money. 

The ideal advisor will create concrete strategies to connect your money to your personal goals to build a fulfilling future. It’s also never too late to start. Whether you’re in your 20s and just beginning your career or in your 50s with retirement looming and no concrete plan, a financial advisor can step in and create an actionable game plan to set you up for a brighter future.

Take action to improve your financial well-being by speaking to one of our fee-only advisors about all of your financial needs. Sign up for a free consultation call today.


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