How We Chose to Do Business
The Fee Only Difference
We are committed to always providing advice that’s in our clients best interest. We believe how your financial advisor gets paid is incredibly important.
Here are the three most common ways financial advisors are compensated:
Fee Only: A Fee Only financial advisor charges the client directly for their advice and ongoing investment management. No other financial incentive is provided by any institution. That means the advisor does not receive commissions by recommending particular financial products.
Fee-Based: This form is often confused with Fee Only, but it’s quite different. Fee-based advisors charge clients a fee for the advice delivered, but they also receive payments for products they sell or recommend. Not only does this make it difficult to know how much money the advisor is being paid, but also incentivizes them to recommend certain products based on the commissions they’ll earn.
Commission: Commission salespeople earn money when their customers purchase a product. They sometimes provide little to no advice, mainly because they aren’t compensated to do so. As a result, the client-advisor relationship can be very transactional. This form of compensation can lead to advisors putting the best interest of their employer ahead of the best interest of their clients.
If your financial advisor is compensated by the products they sell, do they truly have your best interests at heart?
100% of Luminary Financial Planning’s income comes from fees that our clients pay us. This means no hidden agenda, unknown compensation, or unnecessary conflicts of interest.
Fiduciary Standard of Care
Our commitment and dedication to our clients is clear. As a fee-only Registered Investment Advisor firm, we are legally bound by a code of ethics requiring the highest obligation of care, good faith, and trust to always act in our clients’ best interest. We are independent of proprietary products, sales quotas, or other conflicts of interest that could influence our advice.
Unlike financial representatives and brokers who are only held to a suitability standard, we are registered with the State of California and adhere to the stricter fiduciary standard. In essence, we champion for you to protect and promote your long-term financial well being.