Welcome to the latest episode of the Physician Cents Podcast, where we explore complex financial topics tailored specifically for physicians. Whether you're a medical student, resident, fellow, or attending physician, you're going to find valuable insights that can help you increase your financial IQ, further your financial journey, and improve your overall well-being. Hosted by Chad Chubb and Tyler Olson, let’s dive in! 

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Advisor Fees for Physicians: Fee-Based, Fee-Only, AUM, and Flat Fee Explained

Ever sat in the hospital cafeteria, heard a colleague say, “Yeah, I have a guy who manages my money,” and thought, “Cool... but how is he getting paid?”

If that sounds familiar, you are exactly who this is for.

Financial advisor fee terms can feel like pure alphabet soup. You see words like fee-based, advice only, flat fee, AUM, commission, fee only, and your brain just taps out. You are busy, you are smart, and you do not have time to decode marketing language.

This guide breaks all of that down in plain English, with a physician lens. The goal is simple: help physicians understand how advisors get paid, what conflicts of interest pop up, and how to judge whether what you are paying is actually worth it.

Now let us go through each model, what it actually looks like in real life, and where the traps are.

Fee-Based Advisors: When Your Planner Wears Two Hats

What “Fee-Based” Really Means

“Fee-based” sounds safe. It sounds like “I charge a fee, I am on your side.”

In reality, fee-based almost always means the advisor can do two things:

1. Sell products for commissions
2. Charge some sort of fee (flat fee or AUM) for advice or investment management

So they are half advisor, half salesperson. Two hats.

Common example for young physicians:

• You are a resident or fellow.
• You do not have much in investments.
• You cannot or do not want to pay a higher flat fee for planning.

A fee-based advisor shows up, says, “We will do some planning,” then helps you buy disability insurance and term life insurance through them. The insurance company pays them a commission. That commission is often their real compensation.

Typical commission ballpark numbers that Tyler mentioned:

• 40–60% of the first year’s disability insurance premium
• 80–90% of the first year’s term life insurance premium

That is real money. So even if it “feels” free, it is not free.

They may also be allowed to sell:

• Class A mutual funds with front-end loads
• Annuities
• Other commissioned investment products

Separately, they might manage your investments for a fee, often using an AUM structure.

Same person, two pay systems.

Pros, Cons, and Conflicts of Fee-Based Models

This setup is not automatically evil. But you should see the incentives clearly.

Upsides:

• You can get help when you do not have a big portfolio yet.
• You might get disability and term life in place, which are important.
• As your assets grow, you may transition into more of an AUM-based relationship with them.

Big problems:

• Product-first incentives: They only get paid when you buy something. So the natural focus is, “What can I sell you?”
• Short relationship arc: After the sale, many physicians see the relationship fade. You get a policy, maybe a Roth IRA stuffed with expensive funds, and then radio silence.
• Dual loyalty issue: They are part advisor, part commissioned broker. Even if they are good people, that split creates tension between “what pays me” and “what is best for you.”

Common conflicts you should keep in mind:

• They can flip between advisory and broker roles.
• They might push annuities, Class A mutual funds, or whole life policies to get paid.
• After the initial product sale, ongoing financial planning is often weak or nonexistent.

If you are not paying an ongoing fee, ask yourself, “Why would they keep doing deep, proactive planning for me every year for free?” The answer is usually that they will not.

What This Looks Like for Physicians in Real Life

Here is the classic story that Chad and Tyler see all the time:

• A resident or fellow says, “My advisor has worked with me for free for years.”
• Then a real financial planner reviews their accounts.
• Turns out that “free” help came with disability and term life policies sold through that person.
• Their Roth IRA is full of class A mutual funds that paid a roughly 5–6% upfront commission.

So yes, they were paying. Just not with a check they wrote consciously.

Are there some advisors who genuinely do long-term pro bono work for trainees? A few, like Tyler mentioned. But they are rare, and even then, there are human limits to how much free work anyone can do without their business falling apart.

You can still have a great relationship with a fee-based advisor. Some do right by their clients for decades. The key is to know when products are involved, how they get paid, and whether you are actually getting planning or just getting sold.

Advice-Only Planning: Pure Advice, DIY Investing

Now let us flip to the cleanest model from a conflict standpoint.

How Advice-Only Works

Advice-only is a branch of fee-only planning. Under this model:

• You pay a flat fee for planning.
• The advisor does not sell products.
• The advisor does not manage your investments.

They give you advice on:

• Student loans
• Insurance needs
• Cash flow and budgeting
• Retirement savings strategy
• Tax planning ideas
• Estate planning issues

Then you are the one who hits the buttons, rebalances the accounts, places the trades, and executes the strategies.

This can pair well with low-cost platforms like a robo advisor or a managed option such as Vanguard’s Personal Advisor Services or Fidelity’s automated solutions, especially if you want some guardrails but still stay hands-on.

Advice-only is perfect for DIY physicians who love control and do not mind logging into accounts and clicking “rebalance.”

Who It Fits Best (And Where It Breaks)

Advice-only tends to work best if you:

• Enjoy learning about investing
• Are comfortable executing things on your own
• Have a decent level of organization
• Want to keep costs lower and conflicts small

The biggest advantages here:

• Very low conflict of interest: The advisor is not paid by products or your asset level.
• Clear, transparent pricing.
• You know exactly what you are paying for: planning time and expertise.

But there are meaningful pitfalls, and Tyler has seen many of them up close.

Overestimating your DIY abilities is a real risk. The plan looks good in the meeting. You nod along, you say, “Yeah, I will handle that.” Then life kicks in.

Common execution failures:

1. Busy physician life gets in the way You say you will rebalance yearly, handle tax-loss harvesting, move money to the right accounts, and fix your disability coverage. But between call, clinic, conferences, kids, and trying to sleep, those tasks slide.
2. No one is nagging you With ongoing planning, a good advisor will bug you about your will, powers of attorney, and beneficiary reviews. On an advice-only or one-time plan, no one is emailing you twice a year saying, “Please sign your estate documents.”
3. Life changes faster than the plan You switch jobs, move to another state, buy a house, have a baby or three, deal with student loan changes, or join a partnership. A “5-year runway” plan can be outdated in 12 months.

Overestimate your DIY skills at your peril.

If you know you are not going to follow through on a long punch list, advice-only can turn into “I paid for a plan that just lives in a drawer.”

Fee-Only Advisors: Flat Fee, AUM, and Hybrid Models

Now let us unpack the fee-only umbrella, which is where a lot of physician-focused firms live, including WealthKeel LLC and Olson Consulting LLC.

What “Fee-Only” Actually Means

Fee-only means:

• The advisor is paid only by you, the client.
• They do not receive commissions or kickbacks from investment or insurance companies.
• Their revenue does not come from selling you products.

You can still buy insurance or investments, of course. The difference is that the advisor’s compensation is not tied to which policy or which fund you pick.

Under fee-only, compensation usually takes one of three shapes:

• Flat fee
• AUM (assets under management)
• Hybrid of both

A good general overview of advisor compensation styles, including fee-only, is in this guide to advisor compensation models from SmartAsset.

Flat Fee Models

Flat fee is exactly what it sounds like. You agree to pay:

• A specific dollar amount per month, quarter, or year
• In exchange for a defined set of planning and, sometimes, investment management services

Some firms charge the same flat fee for every household. Others, like Chad described, use a tiered system based on your income and net worth, since planning complexity grows as your situation grows.

Big benefits:

• Predictable cost
• You can say, in plain English, “We pay our advisor $X per year.”
• It is easier to judge value. You know the price, so you can look at the service and decide if it feels worth it.

One of Chad’s favorite lines for clients is that he wants them to be the only physician in the hospital cafeteria who can clearly explain how they pay their financial advisor. Flat fee makes that much easier.

AUM (Assets Under Management) Fees

AUM fees are still very common. Under AUM:

• The advisor charges a percentage of the assets they manage for you.
• A classic number is 1% per year.
• It is often tiered, such as:
  • 1% on the first $1 million
  • 0.8% on the next $1 million
  • 0.6% beyond that, and so on

So if you have a $500,000 portfolio at 1%, you pay $5,000 per year, usually deducted directly from the account.

AUM can work well for physicians with higher assets who value convenience. But for many young physicians in early attending years, AUM can be a bad fit because:

• You do not have enough assets to meet minimums.
• The fee is low at first, but then rises a lot as your portfolio grows.
• It is harder to say “I pay my advisor $X,” because the number moves every year.

For a good physician-centered breakdown of AUM vs flat fee, that AUM versus flat-fee comparison on The Physician Philosopher is worth bookmarking.

Hybrid Models

One thing Chad and Tyler are both seeing more: hybrid models.

Examples:

• Flat planning fee for everything, plus a small AUM fee (like 0.25–0.35%) if you want them to handle your investments.
• Flat fee if your investable assets are below, say, $3 million, then switching to a pure AUM model above that.
• Same fee whether the advisor manages assets or not, where investment management is treated as a convenience service, like house cleaning. You can do it yourself, and the fee does not change.

Why this is interesting for physicians:

• You separate the cost of planning from the size of your portfolio.
• You are not “punished” for saving more.
• You can choose whether investment management is something you want to outsource or keep in-house.

Both Chad and Tyler have said a version of this to clients: “We do not care if we manage your assets. You can handle it yourself. Our fee does not change.” That tells you they see investment management as one piece of the service, not the main value.

Commission-Only: When Products Pay the Bills

Commission-only is pure old-school sales. No flat fee. No AUM. The only way the advisor gets paid is if they sell you something.

That “something” might be:

• Whole life or other permanent life insurance
• Disability policy
• Annuity
• High-cost mutual fund share class

There is nothing subtle about the conflict here. The focus naturally centers on, “What product can I get you to buy?”

If a commission-only agent tells you they “do financial planning,” what they usually mean is, “We will chat through some stuff while I figure out what products to recommend.”

As Tyler put it, people tend to focus where they are earning money. In a commission-only setup, that is product sales, not long-term, ongoing planning.

Smart Questions to Ask Any Advisor

Once you understand the models, the next step is interviewing advisors. This is where you put on your attending hat and ask pointed, clear questions.

Here are key ones to use:

1. How do you get paid, and by whom?
   • Is it flat fee, AUM, hourly, commission, or a mix?
   • Are you ever paid by product companies?
2. Exactly how much would I pay you in the first year?
   • In dollars, not just in percentages.
   • What would trigger a fee increase?
3. What services are included in that fee?
   • Do you help with student loans, tax planning, contract review support, insurance analysis, estate planning coordination, cash flow work, and major purchase planning?
   • Or is it mostly investment management and an annual review?
4. How often will we meet or talk?
   • Is it once a year, twice a year, more often?
   • What happens between meetings?
5. If I want to manage my own investments, does your fee change?
   • This reveals whether they see planning as the core service or asset management as the main event.
6. Are your fees clearly listed on your website?
   • If not, that is at least a yellow flag. Most transparent firms put numbers online.
   • For examples of clarity, check firms that focus on physicians like WealthKeel LLC and Olson Consulting LLC, where pricing structures are explained upfront.
7. Do you work primarily with physicians?
   • Physician-specific issues are weird. RVU comp, PSLF, 457(b)s, backdoor Roth IRAs, practice buy-ins, partnership tracks. You want someone who sees these things constantly.

A big mindset shift many physicians need:

Do not assume that paying a fee means your investments will outperform by that amount every year.

You are not only paying for fund selection. You are paying for:

• Behavior coaching when markets are scary
• Tax planning
• Coordinating accounts and goals
• Simplifying your financial life
• Making sure big decisions are thought through, not rushed

If an advisor is only offering basic investment management and a 30-minute annual meeting, and you are paying five figures, that is a problem.

The Costco Rule for Choosing an Advisor

Chad shared one of my favorite analogies for pricing: the Costco rule.

When he walks into Costco, he is not hunting for the cheapest possible thing or the luxury boutique item. His mindset is:

“I am not buying the luxury good or the cheap good. I am buying something reliable.”

He does not care if it is in the auto aisle or the produce section. Costco has already filtered out most of the garbage. He knows he is getting something that is solid, good value, and not over-the-top fancy.

You can apply the same thinking to advisor fees.

• You do not need the rock-bottom cheapest option on the internet.
• You do not need the sleek private wealth shop that charges eye-watering numbers.
• You want reliable value in the middle, with clear fees and real service.

Once you have:

• A few advisors who are fee-only or at least very transparent
• Similar fee ranges
• Solid credentials and experience with physicians

At that point, the tie-breaker is personality and fit.

You are picking someone you might work with for decades, who might help your kids when they are grown, and who knows your entire financial life. You should like them. You should feel comfortable asking “dumb” questions. You should not feel rushed or sold to.

If everything about the relationship feels like a product pitch, walk away.

Bringing It All Together for Physicians

Let us tie this back to that cafeteria conversation.

Instead of saying, “Yeah, I have a guy, not sure how he gets paid,” you want to be the physician who can calmly say:

• Whether your advisor is fee-based, fee-only, advice-only, or commission-based
• How much you are paying, roughly, in dollars
• What you get in return

The exact model you choose matters less than understanding the incentives behind it.

• Fee-based and commission-only can work, but the conflicts are bigger.
• Advice-only is clean, but only works if you actually execute.
• Fee-only flat fee and hybrid models often give a nice mix of clarity and support.
• AUM can be fine, especially at higher asset levels, if the planning is excellent and you know the real cost.

At the end of the day, this is about protecting your future self. Your attending income will attract plenty of people who want a slice. Knowing how advisory fees work lets you choose who actually deserves that slice.

You trained too long and worked too hard to guess about this stuff.

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_{The best of the best list is a paid sponsorship, but these are professionals/companies that Tyler and Chad collaborate with within their own practices or have been vetted to earn a spot on this list. By supporting our sponsors, it allows Chad & Tyler to dedicate more time to you and the Physician Cents community. If you ever have a question (or not a great experience, which we don’t expect!) about a sponsor, please let us know. We call it the “best of the best” for a reason, and we will maintain that standard for our listeners & viewers.}

_{This information is for general purposes only. This information is not intended to be a substitute for specific professional financial, tax, or legal advice, as individual circumstances vary. Please see a financial professional, CPA, and/or an attorney in regards to your own individual situation.}

_{Wealthkeel’s Advisory Services and Financial Planning offered through Vicus Capital, Inc., a Federally Registered Investment Advisor. WealthKeel LLC, 615 Channelside Drive, Suite 207, Tampa, FL 33602 -- 267.590.9533.}

_{Olson Consulting LLC, Offering Advisory Services and Financial Planning, is a State-Registered Investment Advisor.}

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