Commission vs Fee Only Registered Investment Advisors

When Fiduciary Obligations Are Not Enough

When choosing a financial planner or retirement advisor, most investors know the benefits of choosing a Registered Investment Advisor. The fiduciary obligation all RIAs have towards their clients lets you rest assured the person responsible for your portfolio always has your best interest in mind. Even among RIAs, though, there is a very important difference in how they are paid that many investors are unaware of.

Some Registered Investment Advisors receive a commission for the financial products they sell while others charge a small fee for the services rendered. Both are Registered Investment Advisors and have the same fiduciary duties towards their clients. The only difference is in how they are paid.

Investors may suspect commissioned advisors have a conflict of interest in that their commission is based on the products they sell. After all, it’s possible a financial advisor recommends one investment over another in part because the commission on it is higher, putting more money into the advisor’s pocket. As an RIA, this would be a clear breach of duty, although proving it could be impossible and most clients would be completely unaware other, better or lower cost, options even existed.

A fee only Registered Investment Advisor is not paid on commission but instead charges set fees for services. Sometimes, it is a flat dollar amount for a year’s worth of investment advice and financial planning.

Fee only RIAs, like Summit, charge a percent of the assets they have under management, actually making what’s in the client’s best interest in the RIA’s interest as well.

An added benefit of using a fee only RIA is that you know exactly what you will be paying up front. There is no behind the scenes commission structure. Everything is presented up front from the very beginning, letting investors know precisely what the fee is for the services they will receive.

The Only Advisor Who Is Obligated to Promote Your Financial and Moral Well Being

A Registered Investment Advisor who offers investments from Summit for Catholic clients brings all the benefits of a secular Registered Investment Advisor with one major difference: they take your spiritual best interest to heart, as well. As Catholics, we are called to be faithful stewards of the goods God has entrusted to us. Investing solely to maximize profits regardless of the moral implications of our investment choices is clearly at odds with the Catholic faith. Fortunately, the USCCB has laid out very clear investment guidelines for faithful Catholics.

Registered Investment Advisors with Summit are required to act in your best interest, and for Catholics that’s understood to include your spiritual well being.

The fee only Registered Investment Advisors at Summit are ready to help you plan an investment portfolio for eternity. Like any other RIA, we are your fiduciary partner for growing your finances. We only charge a small fee based on the assets you entrust to our management and we are in full accord with the USCCB’s investment guidelines.

Contact our fee only Registered Investment Advisors for a free consultation on how best to manage your investment portfolio in line with Catholic values today!

Post from: Insights