Fee-based compensation
Certified Financial Planner glossary · Certified Financial Planner
Definition
Compensation that includes fees and may also include commissions or product-based pay, unlike fee-only.
Fee-based compensation in plain English
A brochure says "fee-based advice" while the same firm still collects trail commissions on products. Fee-based compensation includes fees and may also include commissions or product-based pay, unlike fee-only arrangements that exclude product commissions. Marketing that blurs fee-based into fee-only is a conduct failure on the exam and in practice. Read the compensation description in the stem, not the slogan on the brochure, before you classify how the planner gets paid.
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