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How Advisors Get Paid

When choosing a financial advisor, it helps to understand how your advisor gets paid because those who live off commissions may have different goals than advisors who work on salary. All people in the financial services industry, which include financial planners and advisors, get paid in one of the following four ways:

  • Commission only: Some advisors receive only commissions for selling financial services products, such as annuities, life insurance, disability insurance, long term care insurance, health insurance, mutual fund investments, real estate investment trust, or loans such as reverse mortgages. Examples include advisors affiliated with companies like State Farm, American Family, Farmers, Edward Jones, etc.
  • Commission and fees: A commonly misunderstood term used to describe this compensation method is fee-based. Examples include registered representatives of companies like Ameriprise Financial, Chase Bank, Wells Fargo Bank, and UBS Financial Services. Commission and fee advisors may receive a fee for developing a financial plan for you and then receive commissions when they sell you insurance and investment products recommended in your financial plan.
  • Salary plus bonuses: Many discount brokerage firms and banks compensate their employees with a base salary plus incentive pay for bringing new client accounts into the institution. They may receive substantially higher bonuses by recommending or selling certain products and services (Proprietary mutual funds) over other options.
  • Fee-only: Fee-only financial advisors provide advice or ongoing management and aren’t registered representatives of any financial services company. They’re typically self-employed Registered Investment Advisors (RIA) or employees of this type of firm. One benefit of hiring fee-only financial advisors is that they have no financial stake in the recommendations they give you. They recommend only what they believe is in your best interest.


The most popular form of compensation for personal financial advisors and planners is currently a combination of commissions and fees. These financial advisors may be affiliated with a large brokerage firm, insurance company and/or bank, or they may be registered representatives with an independent broker-dealer. Often, the majority of their compensation comes from the sale of the products they recommend. However, they may also provide financial planning services and advice for a separate hourly fee, flat fee, or retainer fee.


Fee-only financial advisors charge in three ways:

  • Hourly fee: You pay for all the time that the financial advisor works on your case or spends with you. Multiply the time spent by the advisor’s hourly charge, and that’s how much your fee is. Always find out the expected cost and the maximum cost before you begin working with an advisor who charges by the hour. Hourly-based pricing is best for:
    • People who need specific advice about one or a few financial topics.
    • Do-it-yourselfers who just want a professional’s opinion.
    • People who want to do as much as possible to save money but want expert analysis and direction.
  • Flat fee: Some financial advisors offer flat fees for a package of services. Flat-fee pricing is best for people who need specific advice or services and are willing to take the gamble that the flat-fee arrangement will cost no more than it would have if they paid by the hour.
  • Retainer fee: Retainer fees are typically charged annually so the client has access to the financial professional’s services. Some financial professionals will compute by estimating the amount of time required to provide the services promised based on the complexity of the client’s case and the skills required of the advisor or charge a flat annual retainer fee so the client has access to the advisors hourly fee structure. A retainer fee is best for people who want to transfer the responsibility of managing their personal financial affairs to a financial advisor.

Services Provided

A sampling of services provided.

  • Can I afford to retire now?
  • Am I saving enough to retire one day?
  • How much of a home mortgage can I afford?
  • Expecting an Inheritance and/or Inherited IRA?
  • Review of your 401(k) investment election options?
  • Am I saving properly for my child’s college education?
  • What should I know about long term illness in retirement?
  • Do you need Retirement and Financial Independence Planning?
  • Can we afford to have a parent stay-at-home with our child?
  • Did you win the Lottery? How should I handle all this money?
  • How do I minimize taxes while maximizing my retirement income?
  • Selling your business and needing business succession planning?
  • Am I investing my savings appropriately based on my risk tolerance?
  • What is the best social security benefit election strategy to choose?
  • How can I protect my retirement savings from stock market declines?
  • What is the best way to merge our finances now that we are married?
  • What should I know about Reverse Mortgages and/or Home Equity Loans?
  • Should I elect a Medicare supplement coverage or Medicare advantage coverage?
  • Is my family protected if I am unable to work due to accident or illness?
  • What estate planning documents should I consider? Will or Revocable Living Trust?
  • How does our financial planning need to evolve now that we’re ready to have children?
  • How do I draw down on my retirement savings without running out of money before running out of life?
  • Do you need to discuss major life changes, i.e. death of a spouse, divorce, QDRO (qualified domestic relations order)?
  • What should I know about Required Minimum Distributions from my qualified retirement savings (IRAs, 403(b), TSA, TSP, etc.)?
  • Wanting a review of your variable annuity, life insurance, indexed annuity, fixed annuity, and/or deferred compensation plans?


Our Fee Structure

You Choose What Fits Your Needs!

Flat Fee for Advice

You may decide paying a flat fee for our advice and service rather than a fee based on a percentage of your assets under management and/or commissions based on products you purchase, is best for you.

Annual Retainer Financial Planning Rate:

In addition to charging an hourly fee (see below), we also charge an annual retainer fee for access to our advisory services. Our annual retainer fee $955.00 (includes first 3 hours of consultation)

Hourly Financial Planning Rate:

Rather than utilizing a percentage of AUM (assets under management) cost structure, you may choose to go with a much simpler fee structure and pay by the hour. Our hourly rate $185.

AUM (Assets Under Management) Fee Structure:

This is the most common fee structure in the financial advisory and wealth management profession. Firms charge client(s) a percentage of the assets being managed.

About Jeff

Jeff Carter

Jeff Carter, RICP, CSA, RFC

Jeff Carter is the Managing Member and Founder of Smart Portfolio Management, LLC an Investment Advisory Firm Licensed in Arizona. Jeff is also an IAR (Investment Advisor Representative) of Smart Portfolio Management, LLC. More information is available at the Investment Adviser Public Disclosure website by clicking here.

Since 1992, Jeff has held various security licenses assisting job changers, baby boomers and retirees with structuring effective retirement accumulation portfolios while teaching them how to mitigate risks to the plan and how to create a sustainable stream of income to last throughout their retirement years.

Jeff has achieved the professional designations of Retirement Income Certified Professional (RICP), Registered Financial Consultant (RFC) and Certified Senior Advisor (CSA). These designations are conferred only on those individuals who meet or exceed exacting testing qualification standards.

“Who Knew”

On a personal note, Jeff loves golf and not for your typical reasons. He didn’t achieve a hole-in-one his first time out and he didn’t grow up on any particular golf course. True, there is more than a traceable amount of respect for the game that hovers around the fact that you really only compete with yourself, it is a game of integrity and there is a moral fiber that intertwines itself throughout every aspect of the 18 hole challenge, but he loves the game for one reason…because “Perfection is Unattainable”, this is the beauty of Golf and Life!

Jeff also enjoys travelling, reading, gardening, friends, family and life. He also volunteers his time at Duet Partners in Health & Aging.



SMART Portfolio Management, LLC


, 2633 E Indiand School Road
Suite 410
Phoenix, AZ 85016
O (602) 430-5990