I’m not a CFP, but I have been following what’s going on with the CFP Board and their members who use “fee-only” as their compensation method.
Apparently, the board removed “fee-only” from all members’ profiles after it was reported that certain individuals were calling themselves “fee-only” when they were not.
Now people are claiming that the “fee-only” rule was too vague.
It’s pretty simple, really. If you are “fee-only,” you are FEE-ONLY! Meaning, your fees are paid directly by the client. That’s it. If you get paid by a third party (other than portfolio management fees through Schwab or Fidelity), then you are not fee-only.
It doesn’t surprise me that stock brokers would move to call themselves “fee-only.” The compensation method is gaining in popularity as the public becomes more aware. I’m sure brokers are losing business to “fee-only” planners. What better way to combat the loss of clients than to simply call yourself a “fee-only” planner?
It’s sad and it only confuses clients.
So, the CFP Board should inspect their licensee’s compensation method and fine or revoke the licenses of those who are lying. Pretty simple if you ask me.