What is a fee based service?

A fee-based service is usually offered by a financial advisor who charges an annual percentage of the client's assets as a flat fee for all or most professional services. The average fee is 1% to 3% of the assets. This isn't the same as a fee-based investment which is a product that may pay a commission to the advisor for selling it to clients.

What is the difference between fee-only and fee-based financial advisors?

The difference is that a fee-only advisor removes even the semblance of a commission-based conflict of interest by disallowing themselves to earn sales-related compensation. Fee-based financial advisors earn money from sources beyond the fees their clients pay, such as through commissions and brokerage fees.

What is a fee-based investment?

A fee-based investment is a product that's recommended by a financial planner whose compensation includes a percentage of assets under management (AUM) rather than a commission from clients. This is possibly in addition to an hourly rate and other flat fees or performance-based fees.