The Power of Mistrust

Up to 11% of Certified Financial Planner™ certificants who work for brokerage or insurance firms were describing themselves as “Fee-Only” instead of “Fee and Commission”, according to a recent article in the Wall Street Journal. If a CFP® certificant isn’t accurately describing his or her compensation method, how can you trust that person with your financial future?

The Certified Financial Planner Board of Standards, the CFP certification organization, has defined three compensation methods: 1. Fee-Only, 2. Fee and Commission, and 3. Commission.

“Fee only” is defined by the CFP Board’s Standards of Professional Conduct as follows:

A certificant may describe his or her practice as “Fee-Only” if, and only if, all of the certificant’s compensation from all of his or her client work comes exclusively from the clients in the form of fixed, flat, hourly, percentage or performance-based fees.

If a certificant is an employee of a brokerage or insurance firm, the certificant’s compensation can’t be described as “Fee-Only”, according to the CFP Board.

Jason Zweig, the author of “The Intelligent Investor” column in the Wall Street Journal analyzed the compensation descriptions on, a website for consumers run by the CFP Board. He found that some advisors who describe themselves as “Fee-Only” work for brokerage or insurance firms, and may receive commissions, kickbacks, trails or other hidden compensation.

The article, ‘Fee-Only’ Financial Advisers Who Don’t Charge Fees Alone shines some sunlight on the practices of some CFP certificants who work for large brokerage and insurance firms.

The Power of Trust Peggy and and Tim are proud members of The National Association of Personal Financial Advisors (NAPFA), the leading professional association of Fee-Only financial advisors. The NAPFA motto is “The Power of Trust”. This example of the unseemly behavior of some CFP certificants illustrates why trust is so important.

Tags: Fee-Only Fiduciary NAPFA