The value of choosing an independent, fee-only advisor

(Originally posted in 2020)

One of Camber’s most notable structural differences is that we are independent fee-only advisors. Meaning that we have the flexibility to choose the right solutions and technologies for our clients. Our compensation structure also ensures that we are directly aligned with our clients allowing us to provide them with truly unbiased advice. If a situation of conflict arises it is our fiduciary duty to disclose that information plainly and simply. Join us as we review the two key principles behind our decision to be independent.

Alignment

In the same way, you can tell a lot about a person’s priorities by looking at their wallet and their calendar, you can learn a lot about your advisor’s motives by looking at the way they are incentivized. This does not always come in the form of monetary compensation. Alternative compensation can come in the form of trips, elegant events, or preferential treatment. Regardless of the form of compensation, it can affect an advisor's behaviour.

The problem with this structure occurs when you go to an advisor at a firm that is not independent and ask for their thoughts on investment products or a referral to a complimentary professional service. The advisor is in a position where they are not necessarily giving you truly authentic advice because there are options on the table that pay them and there are options that do not. You need to know all the ways your advisor is compensated to understand if they are acting in your best interest.

In the United States, independent fee-only firm advisors have seen significant growth and as Canadians become more aware of hidden advisor incentives, this trend will no doubt become more prominent in Canada.

Flexibility

What does flexibility mean? It means that we are not constrained by a big firm’s rules around what technologies, tools, and services we can implement for clients. Big companies approve a limited product suite to maintain control and to benefit from volume discounts. This creates the problem of a one size fits all solution. In an age of technology and innovation, we are proud to be open architecture and choose the best solutions for our specific business and our clients.