A fee-only investment advisor is the Investment Advisor who receives a fee from the client for Financial Advisory services, AND does not receive any commission or brokerage from the companies whose products he or she is advising.
As one can see, there is an obvious conflict of interest if an advisor receives brokerage from the AMC from promoting its products. That precludes keeping the client’s best interests in mind since the advisor in all likelihood will promote the products with the highest commission or as per marketing / selling dictates.
What is wrong with that?
The client deserves to get advise as per his or her financial needs and profile. A
What is an investment advise?
Investment advice” is
As per the SEBI Investment Advisers Regulations 2013, an investment adviser shall act in a fiduciary capacity towards its clients and disclose all conflicts of interest, will not receive any commission by way of remuneration and compensation OR In any other form from any person other than the client being advised.
So next time you go to an advisor and get charged a fee for advisory services, find out about his or her conflict of interest.