Advice-only financial planning means you pay a planner for advice, and nothing else. No commissions, no percentage of your investments, no products sold at the end. The plan is the product.
That sounds unremarkable until you look at how most financial advice in Canada is actually paid for. Understanding the difference is the whole point of this guide, because it determines what your advisor is being paid to tell you.
The three ways financial advice gets paid for
Almost every arrangement in Canada is one of three models, or a blend of them.
| Model | How the advisor is paid | What that rewards |
|---|---|---|
| Commission | By the company whose product you buy, such as a mutual fund, a segregated fund, an insurance policy | Selling a product, and selling the products that pay more |
| Assets under management (AUM) | An annual percentage of the portfolio they manage, commonly around 1.5% | Gathering and keeping investable assets under their management |
| Advice-only | Directly by you, as a flat fee or retainer for the planning work | Producing advice you find worth paying for |
None of these makes anyone dishonest. Plenty of commission-based and AUM advisors do careful, conscientious work. But each model has questions it is structurally bad at answering, and it is worth being clear-eyed about which ones.
The questions each model struggles with
An advisor paid a percentage of the assets they manage has a genuine problem with any advice that reduces those assets. Consider the questions a Canadian household actually faces:
- Should I pay off the mortgage instead of investing?
- Should I use $200,000 of my portfolio to help my daughter buy a house?
- Should I take my commuted pension value, or the monthly pension?
- Should I delay CPP to 70 and spend down my RRSP first?
- Should I put money into my corporation or into an individual pension plan?
- Should I give to charity now rather than through my estate?
Every one of those, answered a particular way, shrinks the portfolio the advisor is paid on. That does not mean you will get bad advice. It means the advice costs the advisor money to give, and you should understand that when you receive it.
The question we get asked most often, and the one that most clearly separates the models, is some version of "can I actually afford to retire, and what happens if I spend more?"
Answering it honestly often means telling someone to spend down capital deliberately: to draw the RRSP harder in their sixties, to take the trip, to help the kids now rather than at death. Under an AUM arrangement, that advice reduces the fee base for the rest of the relationship. Under advice-only, it changes nothing about what we are paid.
What "advice-only" does and doesn't mean
The term gets used loosely, and adjacent terms mean different things.
- Advice-only: the planner sells advice and does not sell or manage products at all. No commissions from any source.
- Fee-only: usually means the client pays the advisor directly, but it is sometimes used by advisors who also charge a percentage of assets. Worth asking what it means in a given case.
- Fee-based: commonly means a percentage of assets, and sometimes means fees plus commissions. Despite sounding like fee-only, it often is not.
The reliable test is not the label. It is a direct question: "What are all the ways you are paid, including by anyone other than me?" A planner who can answer that in one plain sentence is telling you their model.
What you actually receive
An advice-only engagement produces analysis and recommendations, not a portfolio. In this practice that typically covers:
- Retirement income projections: how long the money lasts, under what spending, and what breaks it
- The order to draw from RRSP, RRIF, TFSA, corporate and non-registered accounts
- CPP and OAS timing, and how those interact with your other income
- Tax planning across years rather than one filing at a time
- Insurance needs analysis: including whether you are paying for coverage you no longer need
- Estate structure, beneficiary designations and wealth transfer
- For incorporated clients, compensation structure and corporate investment policy
You then implement it yourself, through a discount brokerage, or through an advisor you already have and want to keep. The plan does not require you to move your money anywhere.
What it costs
Advice-only work is priced as a flat fee or a retainer, so you know the cost before you commit. The useful comparison is not "fee versus free": the alternatives are not free, their cost is simply deducted before you see it.
A 1.5% AUM fee on a $1,000,000 portfolio is $15,000 a year, every year, rising as the portfolio grows. It appears on no invoice. The relevant question is whether the advice you get is worth more than the flat fee you would otherwise pay, and at larger portfolio sizes the arithmetic tends to favour paying directly.
Our own fees are published in full on the pricing page, including a calculator comparing a flat fee against a percentage-of-assets arrangement over time.
When advice-only is the wrong choice
It genuinely does not suit everyone, and it is worth saying so plainly.
- You want someone else to manage the investments. Advice-only planners do not manage money. If you want discretionary management, you need a portfolio manager, possibly alongside an advice-only planner, but not instead of one.
- You will not implement it. A plan that sits in a drawer is worse value than a managed account that quietly does the work. Be honest with yourself about this.
- Your situation is genuinely simple. One employer pension, a paid-off house and a modest TFSA may not need a comprehensive plan.
How to check someone out
- Ask how they are paid, in every direction, including from third parties.
- Check the designation. CFP is the recognised financial planning certification in Canada, administered by FP Canada, and can be verified in their public directory.
- Ask what you receive at the end of the engagement, and ask to see a sample.
- Ask who implements it, and what happens afterwards if your circumstances change.
- Ask what they will not do. A planner who claims to do everything is describing a sales process.
Sources
- FP Canada, Certified Financial Planner certification and professional standards (accessed 2026-07-28)
- FP Canada, Find Your Planner directory (accessed 2026-07-28)
About the author
Calgary-based Certified Financial Planner, holding the CFP designation since 2002. He acts as an expert witness and litigation analyst for the legal community, and has served on the boards of the Alberta Insurance Council and the Estate Planning Council of Canada.
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