The term "fee-based consultation" refers to a form of consultation and compensation which is common in wealth consultation and wealth management circles.
As the term implies, in this type of consultation customers pay the consultant a fee for services provided. Fee-based consultants do not accept commissions, finder’s fees and retrocession fees from service providers. The primary advantage of fee-based consultation is that it prevents potential conflicts of interest.
In the strictest and most basic form of fee-based consultation, fees are based entirely on the amount of time which the consultant dedicates to a customer.
Today however, many financial service providers liberally define all business models which exclude third-party commissions as “fee-based consultation”.
Some “fee-based consultants” incorrectly charge recurring wealth management fees as a lump sum or a percentage, regardless of the actual time and effort involved.
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