Three common fee structures

Structure How the advisor gets paid The built-in tension
Commission-based Paid by the product provider (a fund, an insurance policy) when you buy it. The advisor is incentivized to recommend whatever pays the highest commission, not necessarily what's best for you.
AUM-based (assets under management) A percentage of your total portfolio value, charged annually. Aligned with growing your portfolio, but the advisor earns more from a CHF 500,000 portfolio than a CHF 100,000 one, regardless of the effort involved, and typically continues earning whether or not new advice is given that year.
Fee-only (flat or hourly) A fixed fee paid directly by you, unrelated to which products you buy or how large your portfolio is. The closest structure to removing product-related incentives, since the advisor earns the same whether you buy fund A or fund B, or nothing at all.

Why the structure matters more than the sales pitch

Nobody advertises themselves as biased. Every structure above can be paired with someone who genuinely wants the best outcome for their client. But incentives shape behavior over time in ways that good intentions don't fully overcome, this is well-documented across many fields, not unique to finance. A commission structure quietly rewards certain recommendations over others, even when nobody involved intends anything dishonest.

This is why "fee-only" is a meaningfully different claim than "we act in your interest." The first describes a verifiable payment structure. The second is something anyone can say regardless of how they're actually paid.

What to actually ask

Rather than asking whether an advisor is trustworthy, a more useful question is simply: how exactly do you get paid, on this specific recommendation? A fee-only advisor should be able to answer that in one sentence, with no ambiguity about who else might be compensating them.

The takeaway. Fee-only doesn't guarantee better advice, but it removes an entire category of conflict of interest that other structures build in by default. It's a fact about compensation, not a claim about character, and it's verifiable in a way that trust alone isn't.

This article is for general educational and informational purposes only. It is not investment, tax, or legal advice, or an offer of any regulated financial service. Views expressed are those of Surava Capital.

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