Why “Fee-Only” Matters

The New School of Finance is proud to be a fee-only firm. This means we only sell advice, not commission-based products or management services. Whether you’re planning for retirement, navigating self-employment, or looking to optimize government benefits, our advice will be based in unbiased strategy, not sales. We believe Canadians deserve clarity and transparency, not complexity.

Who?

There are so many different words floating around for “someone that helps you with your money”. Here are a few: financial planner, financial advisor, investment advisor, money coach, fund representative, portfolio manager, stockbroker, and on and on… There are many different designations and accreditations, but the most widely recognized certification in Canada is Certified Financial Planner (CFP), overseen by the FP Canada Standards Council.

What?

On top of that complexity, there’s another layer — how that person is compensated for helping you with your money. Another list, by no means exhaustive: commission-based, transaction-based, fee-based, fee-only, advice-only, fee-for-service… There are approximately 17,500 Certified Financial Planners (CFPs), but even within this accreditation, fewer than 1,000 are true “fee-only” planners.

Explaining the terminology

Fee-only

Receives a fee from you, for delivering unbiased financial planning and advice to you for your benefit. They sell you nothing but their own expertise applied to your particular situation. This fee could be set at an hourly rate, or it could be a flat fee established ahead of time for a certain service that you are seeking, e.g. retirement planning or entrepreneurial planning.

Commission-based

Gets paid not by you, but by the companies that make the financial products the planner is selling to you. They may sell you anything from mutual funds to insurance policies to credit cards. Bank advisors are also in this category. Who would you rather get your advice from: someone you are paying, or someone another entity is paying? (That’s a rhetorical question!)

Fee-based

Gets paid a percentage of “assets under management” (AUM), i.e. the money you have invested with them. This feels better, doesn’t it? At least you are playing on the same team, in that if your assets increase in value the fee-based advisor stands to make more money. But let’s look at it from the other side: if your assets decrease in value, you lose money, but the advisor continues to make money since they are still paid a percentage of your investments. They make do make less if your assets shrink, but they still make something while you’re losing money. Fee-based advisors may also be earning commissions on your investments, since the two are not mutually exclusive.

The bottom line

At the end of the day, it is your money and definitely your choice. We strongly believe that fee-only model is the best way to ensure our advice is completely unbiased and 100% tailored to you. You can read more about our philosophy and meet the team here.

Ready to experience the fee-only difference?