Fee-only, advice-only financial planning should not be confused with fee-based investment management, where an investor pays an annual fee to their investment adviser based on a percentage of their investments. A fee-based approach is simply a way to pay your investment adviser.
Fee-only, advice-only financial planning keeps advice and potential products separate, so many clients who work with a fee-only, advice-only financial planner will also have a separate investment adviser or insurance agent.
Lots of fee-based investment advisers use the term fee-only and fee-based interchangeably, which confuses consumers. There has been lots of positive media about fee-only, so everyone seems to be gravitating towards the terminology to capitalize upon this.
So if someone says they're fee-only, you have to clarify. That's why we like the term advice-only so we can clarify we're not investment advisers charging a fee as a percentage of your investments.
Fee-for-service and advice-only mean the same thing.
We're hoping the regulators take steps to regulate terms like this within the financial industry so that everyone understands what they're getting into when they contact a financial adviser. Fingers crossed.