In the world of financial planning, how your advisor is compensated can significantly affect the advice you receive. The other day, I was meeting with a prospective client who asked, “What does it mean to be a fee only advisor?” so we wanted to address this question in today’s newsletter because it’s something we’re proud of.
At Fox Hill Wealth Management, we operate under a fee-only structure, a model we believe fosters transparency and aligns our goals directly with those of our clients.
So what does fee only mean?
Being a fee-only financial advisory firm means that our compensation comes exclusively from the fees our clients pay for our advisory services. Specifically, at Fox Hill, this is calculated as a percentage of the total assets under management (AUM). This structure contrasts sharply with other models where advisors earn commissions based on the products they sell or the transactions they execute. In the traditional commission-based model, financial advisors might receive kickbacks for recommending specific mutual funds, insurance products, or other financial instruments, regardless of whether these are the best choices for the client.
Why Fee-Only Matters
The fee-only model removes potential conflicts of interest inherent in commission-based advising. At Fox Hill, we don’t sell insurance, mutual funds, or any financial products. Our sole revenue source is the management fee we earn from overseeing your investments. This means our only incentive is to grow your portfolio because our success is directly tied to your financial success. We believe this is the most straightforward and honest approach to financial planning.
Imagine discovering that the insurance policy or the mutual fund you were advised to buy wasn’t necessarily the best fit for your needs but was rather selected because it provided the best commission to the advisor. Such scenarios are unfortunately common where advisors’ incentives are not aligned with those of their clients. At Fox Hill, you never have to worry about that. We ensure that every piece of advice and every decision we make on your behalf is done with your best interests in mind.
Choosing a fee-only financial advisor like us at Fox Hill Wealth Management means choosing a partner whose goals are aligned with yours. We pride ourselves on this transparency and commitment to our clients' best interests, free from the conflicts presented by commissions and third-party payments.
If you have any further questions we’re an email or phone call away. Thank you for your continued trust.
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