What Consumer Advocates Say

The fee-only approach to financial planning has been endorsed by Clark Howard, the AARP, the Consumer Federation of America, and state regulators.

“Try to use a planner whose self-interest is aligned exclusively with your own . . . . Consumer Reports continues to believe that fee-only planners remain your best option. Depending on the skills of the planner you hire [and] how entangled your finances are . . . a comprehensive financial plan can cost anywhere from $1,000 to $20,000–or, if you believe the ads of many brokerage firms and insurance companies, nothing at all. While a “free” or cut-rate plan can hold down the initial cost, it introduces an obvious conflict of interest. Our reporter discovered that some planners whose earnings derive mainly from commissions pressed her to buy costly insurance policies. Or they pushed for investment in new mutual funds that had no track record, but which paid the planners selling them.” ~ Consumer Reports

“The most important matter is how the planner is compensated. Hire the planner who . . . has no financial stake in [your] investments.” ~ Forbes

“Financial planners who take commissions have a built-in conflict of interest . . . . Even with disclosure, my choice would be a fee-only planner.” ~ Jane Bryant Quinn

“Start with . . . a financial planner [whose] compensation should be from fees alone.” ~ Money magazine