Fee-based versus Fee-only versus Commission

<p><strong>Josh Tirado: </strong> I'm Josh Tirado. And you're listening to making smart decisions. </p><p>[00:01:47]When choosing a financial advisor, there are many different ways that they can charge you today. We are going to go more in-depth and unpack the different options that are available out there, and which option is best for you.</p><p>[00:01:58]I'm going to do three broad categories. There's a person who is paid on commission. There is a person who is what they call fee only. And the last option is an advisor that is fee-based. I'm going to save fee-based for last because I admittedly I am biased because I am fee-based.</p><p>[00:02:18] And from a compliance standpoint, let me say right now, I don't know which one of these is right for you.  they are very individual decisions, and each one of these options has different pros and cons. And you have to decide which one is right for you and your situation.</p><p>[00:02:36]Let's start with, somebody gets paid via commission. They are a sales person inherently. There is nothing wrong with salespeople. The world does not go round unless things are sold, and people buy, but understand that person's responsibility first and foremost, lies to the company whose product they're selling.</p><p>[00:02:55] secondarily; their responsibility lies with you. But first and foremost, they're a commissioned salesperson representing a certain company or a certain product or a family of products.  </p><p>[00:03:09] When you're doing your due diligence and looking to hire somebody,  look on their website, but not just on the first page, dig down a little deeper. There's usually a lot of extra disclaimers around commission saying that they are a commission, and they are selling certain products.</p><p>[00:03:24] Just know that certain things pay more than others. And the responsibility, first and foremost, is the company that they're representing, not to you as the consumer. Next is the complete opposite end of the spectrum and advisors that are fee only. This is oft