This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Why Your Broker Claimed "Fee-Only" Services Last Week, But Can't Today

By Hal M. Bundruck

NEW YORK (MainStreet) ¿ If you claim you are a "fee only" financial planner, you are going to have to prove it. The Board of Standards for Certified Financial Planners this weekend made that message loud and clear, by initially removing the "fee only" designation as a compensation method in its "Find a CFP Professional" search engine. In an email to certificants, the board instructed members to assess the validity of their claim as a fee only advisor before reclaiming the compensation method. CFP holders can choose from "Commission and Fee," "Commission Only," "Fee-only" or "Salary."

The fee only option is not available to brokers, registered representatives or insurance company agents that may receive commissions or fees, even if they choose not to. According to the CFP compensation disclosure standards a CFP professional "may describe his or her practice as 'fee-only' if and only if, all of the certificant's compensation from all of his or her client work comes exclusively from the clients in the form of fixed, flat, hourly, percentage or performance-based fees."

The CFP Board is taking a firm stance on the matter, applying the fee-only standard to include "related parties."

"For example, a CFP professional may work for an investment advisor that charges only fees for the CFP professional's professional activities," the CFP compensation guidance states. "However, if a related party receives commissions, the definition of "fee-only" is not satisfied, and the CFP professional may not describe his or her compensation as 'fee-only.'"

The organization issued an email Friday to all CFP certificants that claimed fee-only services, notifying them that they had to reconsider their compensation structure before re-stating their practice as "fee-only" on the CFP search engine.

From initial social network feedback, Certified Financial Planners expressed surprise by the Board's sudden move.

"They are allowing the fee-only selection as long as we make certain we are following their new definition," said Paul Coan on the CFP Board LinkedIn discussion group. "I do like that now if (a) so called wirehouse CFP use(s) fee-only they have clearly broken a rule."

--Written by Hal M. Bundrick for MainStreet

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,943.81 +28.74 0.17%
S&P 500 1,967.57 +2.89 0.15%
NASDAQ 4,415.49 +19.2860 0.44%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto
Advertising Partners

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs