Creating an alliance through compensation

How you pay your advisor can bring you closer together

There are three primary ways to compensate your advisor. Entitled, fee-only, commission-only, and fee-based, respectively, the differences between these compensation schemes has significant bearing on your advisor’s motivation. Let’s sort them out.


When an advisor is fee-only, they receive compensation solely from their clients. It doesn’t matter how many transactions occur or what funds are selected, the advisor cannot be paid by a non-client party. Being fee-only is uncommon in the financial advice world because it often makes client relationships less profitable. Skyline advisors are fee-only, without exception.

Learn more about our fees


This sort of compensation arrangement is familiar to most people, as it is the scheme under which salesmen typically operate. Money is made when a product is sold. Not shockingly, hiring a commission-only advisor will lead to more buy/sell discussions than you would find otherwise. Naturally, there are very few commission-only and fiduciary, financial advisors.


An advisor is fee-based when they take compensation from both their clients and from product sales. Essentially this label is a mix of the two previous labels. Fee-based advisors are subject to disclosure rules, but that doesn’t always make it easy to parse out where their loyalties lie. Why choose an advisor with potentially polluted interests?

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