A fee-only adviser is compensated solely by client fees and receives no commissions, referral payments, or third-party compensation from product providers. It differs from fee-based, which describes a professional who charges fees and may also earn commissions.
The distinction between fee-only and fee-based is one word and a meaningful difference in incentives, which is why the terms are worth checking rather than assuming.
Fee-only does not by itself indicate quality. It removes a specific category of conflict; it says nothing about competence, and it is not a substitute for reading the Form ADV.
This definition is provided for educational purposes. It is general information, not investment, tax, or legal advice, and it does not account for any individual circumstances.