Why Military Families Should Choose a Fee-Only Financial Professional
When it comes to choosing a financial professional, one of the most critical—but often overlooked—decisions is how that professional is paid. For military and veteran families seeking financial guidance, understanding the various compensation models can make the difference between getting recommendations that are in your best interest or recommendations that are just OK for you, but great for your financial professional.
Within the Military Qualified Financial Planner Certification Program, we believe that the fee-only model is not just a better choice—it’s the only sensible choice for military and veteran families. In this article, we’ll explore why this model provides better alignment, greater transparency, and more trustworthy service, especially for those in the military who turn to a financial planner, coach, or counselor for guidance.
Understanding the Different Compensation Models
Before diving into the benefits of the fee-only model, let’s define the three primary ways financial professionals get paid:
- Commissions: These advisors earn money by selling financial products like insurance, expensive mutual funds, or annuities. They may not charge clients directly but are compensated by third parties—usually the financial institutions whose products they sell.
- Fee-Based: Often confused with fee-only, fee-based advisors can charge a flat fee or hourly rate and also earn commissions. They straddle both worlds, which can lead to conflicts of interest.
- Fee-Only: Fee-only advisors are compensated only by their clients. They do not earn commissions or incentives from product sales. Their income is tied entirely to the advice and service they provide.
When you hire a financial professional, you want them to work for you. If you are not paying them, can you be sure the recommendations they are making are truly in your best interests? They might be making recommendations based on the commission they will earn if you buy the product they recommend.
Why Fee-Only Matters for Military and Veteran Families
Financial advisors who earn their money through commissions do not like to talk about their compensation model. They try their best to keep those costs hidden. Billionaire Charlie Munger, Warren Buffet’s business partner for many years, once said, “Hiring a financial advisor is like going to a magic show. The things you think you see are not really happening while the things that are really happening, you can’t see!”
Military families face unique financial circumstances, and these challenges are best addressed by financial service that is not only personalized, but also free from many of the things you ‘can’t see happening’. Fee-only advice eliminates many of the hidden costs and incentives to which Charlie Munger was referring.
Here’s why working with a fee-only military financial professional is the best choice:
1. No Hidden Agendas
A fee-only professional is not incentivized to push a product that pays the highest commission. Their focus remains squarely on helping you meet your goals, not meeting sales quotas. That’s particularly important for service members who are often targeted with aggressive sales tactics for high-cost insurance, unnecessary annuities, or underperforming investment products.
2. Transparency and Simplicity
The fee-only model is refreshingly straightforward. You know exactly what you’re paying, how often, and what you’re getting in return. There are no confusing commission structures, surrender charges, or hidden fees.
For example, a fee-only advisor might charge:
- A flat annual subscription for unlimited service
- An hourly rate
- A fee for a particular project
- A percentage of assets under management (AUM)
Whatever the format, it’s disclosed upfront and directly to you—no fine print, no surprise costs. This transparency gives military families the clarity and confidence needed to make informed financial decisions.
3. Customized, Ongoing Guidance
Military life is anything but static. A fee-only professional can offer ongoing coaching that adapts as your needs change—whether you’re transitioning out of active duty, planning for a VA home loan, or managing college costs with the Post-9/11 GI Bill.
Because they’re not trying to sell you something, fee-only professionals can focus on education and empowerment. You get a trusted partner who helps you build a financial strategy around your unique military lifestyle.
4. Eliminating Some Conflicts of Interest
A commission-based advisor might face a conflict between what’s right for the client and what pays them best. Even well-meaning advisors can fall prey to these incentives. In contrast, a fee-only model reduces conflicts of interest. When compensation is tied solely to the value of the service, not the sale of a product, the financial professional has no reason to recommend anything but the best next step for you.
How to Find a Fee-Only Military Financial Professional
Not all financial professionals serving the military community are fee-only, so it’s important to ask a few key questions:
- How are you compensated?
- Do you receive commissions or incentives from products you recommend?
- Are you a fiduciary 100% of the time?
You can also look for designations that indicate a commitment to fee-only, fiduciary service. MQFP.org is proud to promote professionals who meet the highest standards and understand the military lifestyle from the inside out.
Conclusion: Fee-Only Is More Than a Payment Method—It’s a Philosophy
Choosing a fee-only military financial professional isn’t just about dollars and cents. It’s about choosing integrity, transparency, and a true partnership built on trust. For military and veteran families navigating a complex financial world, this model offers peace of mind—and better outcomes.
All Military Qualified Financial Planners – MQFP® are required to sign an oath that they meet the stringent National Association of Personal Financial Advisors’ definition of fee-only. When you work with an MQFP®, you can trust their recommendations are based on what’s best for your family—not what’s best for their bottom line.
Whether you’re active duty, transitioning, or long since retired, you deserve a financial professional who works for you and only you. That’s what the fee-only model delivers—and why it’s required by the MQFP® Certification Program.
About MQFP.org
MQFP.org is the home of the Military Qualified Financial Planner-MQFP® designation, the nation’s only credential built specifically for financial professionals who have a military background and serve military and veteran families. We advocate for fiduciary, fee-only practices and believe every service member deserves financial security and high-quality, conflict-free financial guidance.
