If you are evaluating an advisor, the most important question is not “What product are they recommending?” It is “How do they get paid — and does that payment create a conflict with what’s best for you?”
Martino Capital is a Colorado-registered investment adviser. We act as fiduciaries. Our standard model is a single, transparent fee based on assets under management, with no product kickbacks and no layered third-party manager fees on top of ours. On annuity or insurance products, we do not take commissions or hidden kickbacks unless that structure benefits the client; if a transparent commission costs less than our AUM fee, we use it and disclose it plainly. We do not collect both an AUM fee and a product commission on the same product (no double-dip).
This article explains the conflicts many investors never see — and the questions that surface them.
Why compensation conflicts matter
When an advisor is paid by a product manufacturer, a brokerage platform, or a third-party manager, their incentives can quietly drift away from yours. You may still get a polished presentation. You may still get regular meetings. What you may not get is a clean answer to: “If this weren’t compensable for you, would you still recommend it?”
Fiduciary duty requires putting the client’s interests first. Suitability standards (common in brokerage relationships) only require that a recommendation be suitable — not that it be the best available option after conflicts are removed.
Seven places conflicts hide
1. Product commissions
Some annuities, insurance policies, and alternative products pay large upfront or trailing commissions. A high commission is not automatically wrong — but it must be visible, compared to alternatives, and justified for your situation.
Ask: “What do you earn if I buy this? What do you earn if I don’t?”
2. Revenue sharing and shelf space
Platforms sometimes pay advisors or their firms for preferring certain funds or products. That can steer portfolios toward higher-cost options.
Ask: “Do you or your firm receive revenue sharing, marketing support, or shelf-space payments from any product providers?”
3. Soft dollars
Research, data, or “free” tools paid for with client trading commissions can be legitimate — or a soft way to shift costs.
Ask: “Do you use soft-dollar arrangements? How do clients benefit, and how is that disclosed?”
4. Layered manager fees (TAMPs and outsourced portfolios)
Many advisory firms outsource day-to-day portfolio management to a turnkey asset management platform (TAMP) or model provider. You may pay the advisor and the underlying manager.
Ask: “Who actually manages my portfolio day to day? How many layers of fees are in this recommendation?”
5. Proprietary products
If the firm manufactures the product it sells, the conflict is structural.
Ask: “Is this a proprietary product? What comparable non-proprietary options did you consider?”
6. Account-type bias
Commissionable brokerage accounts, wrap programs, and advisory accounts can produce different payouts for similar work.
Ask: “Why this account type? Show me total cost in dollars, not just percentages.”
7. Referral and solicitor fees
Referrals can be valuable. Paid referrals must be disclosed.
Ask: “Does anyone get paid for introducing us — either direction?”
A simple comparison framework
For any recommendation, ask for a one-page comparison:
- Total client cost (advisor fee + product cost + underlying manager fees)
- Advisor compensation (AUM, commission, both, or other)
- Who manages the assets daily
- What happens if you say no to the product
- Written disclosure of material conflicts
If the advisor cannot or will not put that on one page, treat that as information.
How Martino Capital approaches this
- Standard relationship: single transparent AUM-based fee.
- No product kickbacks; no layered third-party manager fees on top of ours.
- Direct in-house portfolio management — we do not outsource day-to-day management to a TAMP. Custodian systems and Black Diamond are tooling we operate on — not a handoff.
- Annuities / insurance: we do not take commissions or hidden kickbacks unless that structure benefits the client. We act as a fiduciary. If an annuity is the best fit, we compare costs. If a transparent commission costs less than our AUM fee, we use that — and disclose it plainly. We do not collect both an AUM fee and a product commission on the same product (no double-dip).
- Public disclosures: review our Form ADV on IAPD.
Tom Martino’s background as a long-time consumer advocate shapes how we talk about conflicts: plain language, no fog, and a bias toward what the client can verify.
FAQ
Is a commission always a red flag?
No. A disclosed commission that is cheaper and more appropriate than an AUM fee can be the better client outcome. Hidden or unexplained commissions are the problem.
What is the difference between fee-only and fee-based?
“Fee-only” generally means compensation from client fees, not product commissions. “Fee-based” can include both fees and commissions. Always ask for the firm’s actual compensation map — labels are marketing.
How do I verify an RIA?
Search the firm and individuals on SEC IAPD / AdviserInfo. Read Form ADV Part 2A. Confirm registration status and disclosures.
Do you manage portfolios in-house?
Yes. Martino Capital designs and manages portfolios directly for clients. We do not outsource day-to-day management to a TAMP; custodian/Black Diamond platforms are tooling, not a handoff.
Next step
If you want a second set of eyes on how your current advisor is compensated — or you want a fiduciary conversation with no product pitch — call 303.771.4357 or use our contact page.
Martino Capital, LLC is a registered investment adviser. Registration does not imply a certain level of skill or training. This article is for general education and is not personalized investment, tax, or legal advice. Investing involves risk, including possible loss of principal.
Page reviewed September 2026 for clarity. This is educational information, not personalized investment advice.