We were fee only financial advisors in Las Vegas before it was cool!
We’re Fee-Only Financial Advisors
When Redrock Wealth Management was founded in 2005, our #1 goal was to provide truly conflict-free financial advice. After all, if your doctor was paid commissions by drug companies, wouldn’t you question the prescriptions they write for you?
Unfortunately, commission based and fee-based advice is the “status quo” in the financial services industry. Unless your financial advisor is paid solely by you – they’re going to hock insurance and investment products from the company who writes their paycheck.
No, we are not fee-based!
The #1 misconception the public has is “commissions are bad, so find a fee-based advisor“. Granted, we don’t believe in accepting large chunks of money to sell investment or insurance products. If we did, what would stop us from selling the products which paid the highest commissions? Nothing!
Unfortunately, 99% of the public thinks “fee-based is good”. Fee-based is a misnomer. It’s a fancy marketing term created by Wall Street which simply means your financial advisor accepts fees and commissions!
If your advisor can earn a huge chunk of money (the commission) by selling you products, and earn fees for other services, how does that solve the problem? It doesn’t, there’s still a massive conflict of interest, and the allure of a fat commission paycheck.
For this reason, it’s critical to know we are purely fee-only! We never accept any form of commission, perks, or benefits to sell investment or insurance products. Unfortunately, most people still think “fee only financial advisors” are the same as “fee based financial advisors”.
Who writes your financial advisor’s paycheck?
The easiest way to know if your financial advisor has your best interests at heart is to figure out who writes their paycheck. If their paycheck comes from some Wall Street investment or insurance company, guess what products and services they’re going to pitch you—whatever their employer wants to sell.
Trust me, I know, I’ve lived that life. I was a typical Wall Street advisor early in my career. We “financial advisors” would scurry to shut our door and get on the phone when we saw the manager walking the halls. We all knew he was coming to see if we had sold enough of whatever product the company wanted us to sell at that particular time. It became known as the “product of the month” because our quotas – and paychecks – came monthly.
~ Greg Phelps, CFP®, CLU®, AIF®, AAMS®
On the other hand, if your financial advisor is paid directly by you, guess whose interests they’re going to look out for.
While We’re Rare, We’re Not Alone
- Are compensated through fees only paid directly by clients (no commissions and not a fee-based financial advisor)
- Have met stiff credentialing and educational requirements
- Complete NAPFA’s continuing education requirements, which are more stringent than those set by the CERTIFIED FINANCIAL PLANNER ™ (CFP ®) Board of Standards
- Have submitted to outside professional review to ensure no conflicts of interest exist between compensation paid and the financial advice provided
- Embrace the National Association of Personal Financial Advisors Code of Ethics
NAPFA Fee-Only Financial Advisors Code of Ethics
Objectivity: NAPFA members strive to be as unbiased as possible in providing advice to clients and NAPFA members practice on a fee-only basis.
Confidentiality: NAPFA members shall keep all client data private unless authorization is received from the client to share it. NAPFA members shall treat all documents with care and take care when disposing of them. Relations with clients shall be kept private.
Competence: NAPFA members shall strive to maintain a high level of knowledge and ability. Members shall attain continuing education at least at the minimum level required by NAPFA. Members shall not provide advice in areas where they are not capable.
Fairness & Suitability: Dealings and recommendation with clients will always be in the client’s best interests. NAPFA members put their clients first.
Integrity & Honesty: NAPFA members will endeavor to always take the high road and to be ever mindful of the potential for misunderstanding that can accrue in normal human interactions. NAPFA members will be diligent to keep actions and reactions so far above board that a thinking client, or other professional, would not doubt intentions. In all actions, NAPFA members should be mindful that in addition to serving our clients, we are about the business of building a profession and our actions should reflect this.
Regulatory Compliance: NAPFA members will strive to maintain conformity with legal regulations.
Full Disclosure: NAPFA members shall fully describe method of compensation and potential conflicts of interest to clients and also specify the total cost of investments.
Professionalism: NAPFA members shall conduct themselves in a way that would be a credit to NAPFA at all times. NAPFA membership involves integrity, honest treatment of clients, and treating people with respect.