Fiduciary is a legal term defined by the Investment Advisers Act of 1940 and regulated by the SEC that simply means always acting in the best interest of our clients when we offer financial advice. We believe in sitting on the same side of the table with you and operating in your best interest at all times.

Fee-only means that we are only paid by our clients for our financial advice – we do not have a mortgage, insurance, banking, or accounting business. We also do not accept referral payments from CPAs, attorneys, or insurance agents. This is, in our opinion, the right way to operate.

The definition of a “fee-only” financial planner can be very confusing in the world of personal financial advisors. There are national associations focused on the “fee-only” issue, and the fee-only model has certainly grown more popular since HB Wealth was founded in 1989. When you are receiving comprehensive financial planning advice, you want to feel good about the incentives of your financial advisor. You want to feel that your advisor is on the same side of the table as you are. A bank or brokerage firm may use the word fee-based to attempt to confuse you, or may charge a flat fee for a specific service and thus claim they do not have this potential issue. Whether you are interested in comprehensive financial planning or investment management, this distinction is important to understand when choosing a financial advisor. This is where understanding “fee-based advisors” vs. “fee-only advisors” can be important.

Fee-only financial advisors are paid only directly by the client for their advice via the one clear fee charged to them directly, with no other sources of revenue coming from conflicting sources. Fee-based advisors may charge a fee directly to the clients, but then also make money in other ways that are less transparent or less attractive in terms of potential conflicts. This may include selling other financial services to you as the client (e.g. insurance, tax preparation, legal work, mortgages, banking, etc.) or it may involve earning extra money based on the investment decisions made by the client (e.g. incentive fees for a private fund, placement fees, 12b-1 mutual fund fees, etc.). Many brokers may be quick to mention that they do not earn stock commissions on trades, but not be as quick to mention the other ways they might get paid based on your relationship that have nothing to do with stock commissions. We believe that your goal should be for your financial advisor to only be paid directly by you in a transparent simple approach that is not connected to how you invest, what financial services you need, or which other financial services you choose to use.

Knowing what services you are receiving, whether investment advice, investment management, retirement planning, tax planning, financial planning, etc., and the fees associated with those services are an important factor when working with a financial advisor. A financial planner should not make this difficult, dance around the topic, have hidden charges, or have an obvious conflict of interest due to a product offering. As fee-only advisors with a fiduciary responsibility, HB Wealth built our approach to give you full transparency regarding fees. We want to provide comfort to our clients that they are receiving a client service experience in order to accomplish their goals of having comprehensive financial planning for their family and future generations – not to drive extra fees for our firm. Our fee-only approach reduces conflict with our clients and helps to ensure our financial advisors are acting as a fiduciary for you every day. Our number one priority is you and your family, and we built our wealth management model around that goal. If you believe you want your advisor more on the same side of the table with you instead of focusing on selling you products, we believe HB Wealth could be the right fit for your family.

Banks and brokerages often have complex compensation systems that you may not fully understand where your advisor may be paid extra money to recommend certain funds or investments (or loans or insurance or other financial products). Even some of our fellow RIAs (registered investment advisers) claim to be fiduciary independent advisors but then happen to have an insurance business or accounting business or mortgage business that creates a conflict of interest that we feel is unnecessary.