One persistent misconception is that fee-based is the same as fee-only. It most certainly is not. Fee-only advisers are compensated only by the advisory fees clients pay them. Fee-based advisers may accept commissions or other compensation from the companies whose products they recommend and sell. Obviously, these commissions or other forms of compensation potentially create unhealthy conflicts of interests.
PNW Asset Management is a fee-only registered investment adviser and receives NO compensation – that’s ZERO – from any outside vendor, period. In our view, a registered investment adviser should not receive additional compensation from activity on your account from insurance, mutual funds, stock brokerage firms, or any other vendor UNLESS THE REGISTERED INVESTMENT ADVISER CREDITS YOUR ACCOUNT and offsets your advisory fee for a like amount.
ALWAYS ask your adviser about all sources of their compensation from, or associated with, your account. If they receive commissions for products and insurance they recommend and sell, or if they recommend and sell you proprietary products, PROTECT YOURSELF AT ALL TIMES, and by all means, read the disclosure documents they are required to provide you, especially the conflicts of interest disclosures in their Brochure (Form ADV Part 2A)!