Financial Advisor Compensation: How They Get Paid and What It Means for You

When you hire a financial advisor, a professional who helps you manage money, plan for retirement, or invest wisely. Also known as a financial planner, it's easy to assume they work solely for your benefit. But how they get paid — their financial advisor compensation — can change everything about the advice you get. Some earn commissions when they sell you products. Others charge a flat fee or a percentage of your assets. These models don’t just affect your wallet — they shape what advice you hear.

Think about it: if your advisor makes more money pushing a specific mutual fund or insurance policy, you might not hear about cheaper, better alternatives. That’s the commission-based advisor model — common at big banks and insurance firms. It’s not illegal, but it creates a conflict of interest. On the other hand, a fee-only advisor gets paid directly by you, usually hourly or as a percentage of what you invest. No kickbacks. No product quotas. Their incentive is to help you grow your money, not sell you something.

Most people don’t ask how their advisor gets paid until it’s too late. A 1% annual fee on $500,000 sounds small — until you realize that’s $5,000 a year, every year, whether your portfolio goes up or down. Meanwhile, commission-based advisors might push high-fee products that eat into your returns without you even noticing. The financial advisor compensation model you choose determines whether you’re getting a guide or a salesperson.

What you’ll find below are real breakdowns of how different advisors make money, what hidden costs hide in plain sight, and how to spot the ones who truly put you first. From how EWA funding models relate to advisor incentives to why some platforms charge you indirectly through product markups, these posts cut through the noise. You’ll learn what to ask before signing anything, how to compare fees side-by-side, and which compensation structures actually align with your goals — not theirs.