What exactly is fee based versus commission based?
A commission based advisor gets paid for buying or selling different securities like stocks, bonds, etc. This commission is paid to the advisor regardless of the performance of the underlying holding or actual time spent working with the client. A fee-based advisor gets paid a specific percentage of the assets they actually manage for a particular client. If the portfolio being managed performs positively the advisor will earn a higher fee in dollars and consequently if the portfolio performs negatively the advisor will earn a lower fee.