What's the difference between commission-based, fee-based, and fee-only financial advisors?

Commission-based advisors earn money when you purchase financial products, fee-based advisors charge fees and may also earn commissions, and fee-only advisors charge only fees with no commissions. Understanding which model your advisor uses is critical to recognizing potential conflicts of interest.

How are asset-based advisory fees calculated?

Asset-based advisory fees are typically calculated as a percentage of assets under management. This percentage may vary by account size and may include different services such as investment management, financial planning, and other advisory services.

What does it mean for a financial advisor to act as a fiduciary?

Acting as a fiduciary means the advisor has a legal obligation to act in the client's best interest at all times, even when it conflicts with their own financial interests.

How do mutual fund expenses and basis points affect my investment costs?

Mutual fund expenses (expressed in basis points) reduce the returns you receive. Understanding these costs and comparing them across funds is important for managing your overall investment expenses and maximizing long-term returns.

Why does fee transparency matter more than choosing the lowest cost?

Transparency helps you understand what you're paying for and what value you receive in return. The lowest-cost advisor may not provide the services or quality you need, so comparing total value is more important than price alone.

Do You Know What You’re Paying For? – Episode 57

Aug 20, 2026 | Financial Fundamentals | 0 comments

THE ABOUT PODCAST | EPISODE 57

Do You Know What You're Paying For?

Understanding financial advisor fees and the value behind them

Financial advice comes with a cost, but understanding how an advisor is paid, and what you receive in return, can sometimes feel more complicated than it should. Roy and Jeremy explain the differences between commission-based, fee-based, and fee-only financial services.

Episode Summary

Roy Hucke and Jeremy Scott explain the differences between commission-based, fee-based, and fee-only financial services. They discuss how each model works, how asset-based advisory fees are calculated, and what it means for an advisor to act as a fiduciary.

From investment management and financial planning to mutual fund expenses, billing methods, and basis points, this conversation gives listeners practical questions to ask so they can clearly understand both the cost and the value of financial advice.

Key Topics & Takeaways

The differences between commission-based, fee-based, and fee-only financial services.
How asset-based advisory fees are calculated and what may be included in the fee.
What it means for a financial advisor to act as a fiduciary.
Why financial planning may include much more than investment management alone.
How mutual fund expenses and basis points can affect the total cost of investing.
Why fee transparency and the value you receive matter more than simply choosing the lowest cost.

Timestamps

0:00 – Why understanding financial advisor fees matters
2:35 – What are you paying for, and what value are you receiving?
3:00 – How commission-based financial services work
4:43 – Fee-based advice, fiduciary responsibility, and asset-based fees
7:15 – How fee-only financial planning works
9:17 – The planning services that may go beyond investment management
17:56 – Comparing cost, service, and value across different fee models
25:38 – Mutual fund expenses, ongoing costs, and potential conflicts
28:40 – How advisory fees may be calculated and deducted from accounts
30:40 – What basis points mean and how to convert them to percentages
32:18 – The key question: Can you explain what you pay and what you receive?

Resources & Links

Download the Show Notes

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Download Episode 57 Show Notes (PDF)

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