There is a fair bit of confusion in the financial services area on the types of financial advisors that exist. There are three main categories of advisors - a brief explanation is below.

Fee Only Planning Only Advisors

Fee only, planning only advisors charge a fee for financial planning and don’t sell anything. Who’s a good candidate for this type of service?

• You manage your own investments and are comfortable with that.

• All of your money is in your employer sponsored retirement plan (typically 401(k) or 403(b) and you want help understanding your investment choices and asset allocation.

• You haven’t accumulated significant investments (yet).

• You have an advisor who manages your investments, but does not do comprehensive financial planning.

• You’re looking for a second opinion or just want some advice.

This is what I do.

Fee Only Advisors

Fee only advisors typically (but not always) do financial planning to one degree or another. Some charge a separate fee for financial planning, others don’t. They will manage your investment portfolio and charge an annual fee for that service. They do not sell individual securities or insurance or earn a commission on these products.

Advisors, Brokers, Agents, Consultants

There are many terms for individuals who provide advice and services in this category – generically referred to as “Financial Advisors” The only real difference between “Fee Only” advisors and this category is the number and type of financial vehicles they have available. They typically sell other products such as life, disability and long-term care insurance, individual securities, and annuities. They may or may not provide any real financial planning.

Who is a good candidate for these types of service?

• You are either not comfortable with or not interested in managing your own investments.

• You have accumulated or inherited a significant amount of investable assets.

• You are looking for a “one-stop shop” where they will take care of the investing for you, provide the insurance products that you may need and provide other services such as managing your required minimum distributions.

This is not what I do, but I know a variety of wonderful people who use these business models and I’m happy to refer you to them.

There is no right or wrong way of doing business. It’s really a question of your needs.

Either way – send me a note. I’m happy to have a conversation and help you determine next steps.