Raub Brock Capital Management was founded with the goal of providing objective financial advice that emphasizes service and integrity rather than sales and production. Since the day we opened our doors over 15 years ago, we have always been a fee-only firm. "Fee-only" means we accept payment only from our clients. We accept no funds or commissions from mutual fund companies, insurance companies, or other service providers. Our compensation is transparent to our clients and the value-add is clear.
From the client's standpoint, the advantage of the fee-only model is that there is no incentive on our part to generate commissions through the unnecessary buying and/or selling of securities ("churning"), or to convert non-cash assets such as real estate and collectibles to cash and securities so that the advisor can generate commission income.
The fee-only model is in contrast to the more common compensation structure in our industry, which relies either partially or entirely on commissions. Under this structure, advisory firms receive compensation for selling certain insurance contracts or recommending certain mutual funds or other investment vehicles. Recently, some firms operating under this type of model have begun marketing themselves as "fee-based," which is meant to indicate that at least some of their compensation comes from clients, in addition to commissions. Those firms calling themselves "fee-based" thus aim to differentiate themselves from those who are entirely commission-based, but we believe a fee structure based even partially on commissions cannot offer clients the assurance they need that they are receiving fully unbiased advice.