Currently, advisors are compensated in one of two manners. They either receive commissions from the products they sell or receive fees from the assets they manage. We believe that both models have limitations. For the commissions-based advisor, his advice becomes catered to the products he has to sell. Though it is possible for his advice to be independent, he can still only service clients who have need of his products. For the fee-based advisor, while his fees do not incur as much conflict of interest, they too are limited to service only those who have obtained invested assets. This limits him in the clients he can serve.
Bona Fide Finance is in agreement with organizations such as NAPFA and XYPN: advisors should be paid by the client for the planning done, and not by a third party for products sold. We utilize a fee-only compensation model which allows us to service the needs of our clients over our own.
Simply put, we would not want to work with a doctor who is paid based on how many pharmaceutical drugs he provides to his patients. We believe the same applies for financial planning; that is why fee-only planning is better and that is why we are a fee-only firm.