If you are comparing advisors, the labels on the brochure — “fee-only,” “fee-based,” “AUM” — sound precise. They are not. Two firms can use the same phrase and get paid in completely different ways. For high-net-worth clients, that gap is where costs and conflicts hide.
In plain English: “Fee-only” generally means an adviser is paid by client fees, not product commissions. “Fee-based” can mix fees and commissions. Ask how every dollar of compensation is earned before you compare headline percentages.
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 guide translates the marketing language into questions you can actually ask. For a fuller pre-transfer checklist, see questions to ask any advisor before you hand over a portfolio.
What does “fee-only” mean?
In industry shorthand, fee-only usually means the adviser is paid by the client — hourly, project, retainer, or a percentage of assets — and does not accept commissions from product manufacturers for selling funds, insurance, or annuities.
That is a useful starting point. It is not a guarantee of low cost or zero conflict. A fee-only firm can still charge a high AUM percentage, outsource day-to-day management to a TAMP (leaving you with multiple fee layers), or prefer affiliated strategies that keep revenue inside the firm.
Ask: “Show me every dollar you — and anyone you hire on my behalf — earn from my relationship, in dollars, not just percentages.”
What does “fee-based” mean?
Fee-based is the phrase that confuses people most. It often means the firm can charge advisory fees and earn commissions on products. You may have an advisory account and be sold commissionable insurance or alternatives in the same relationship.
Fee-based is not automatically “worse” than fee-only. A transparent commission on a product that truly fits — and costs less than an ongoing AUM wrap — can be the better deal. The risk is opacity: if you cannot tell when the firm is acting as adviser versus salesperson, you cannot evaluate the conflict.
Ask: “For this recommendation, are you paid as an adviser, as a commissioned agent, or both? Put the amounts side by side.”
What does an AUM fee actually cover?
An assets-under-management (AUM) fee is a percentage of the portfolio you entrust to the firm, typically billed quarterly. Done well, it aligns the adviser with growing and protecting your capital. Done poorly, it becomes a subscription to a model that a third party runs while you pay the adviser for “oversight.”
Clarify at least four things:
- Who manages the portfolio day to day — the firm you hired, or a TAMP / model provider?
- How many fee layers exist — adviser + platform + underlying managers?
- What services are included — planning and tax coordination, or investment management only?
- How billing works — breakpoints, householding, or fees on cash you asked them not to invest?
Martino Capital’s standard relationship is a single transparent AUM fee. We manage portfolios in-house — we do not outsource day-to-day management to a TAMP (custodian/Black Diamond = tooling, not a handoff). We do not add layered third-party manager fees on top of ours, and we do not take product kickbacks.
Is “fiduciary” the same as “fee-only”?
No. Fiduciary duty is a legal and ethical standard: put the client’s interests first and disclose material conflicts. Fee-only is a compensation label. Fiduciaries may charge AUM fees, project fees, or — in limited cases — a disclosed commission when that structure is better for the client. Suitability standards (common in brokerage channels) only require that a recommendation be “suitable,” not that it be the best available option after conflicts are removed.
For how compensation conflicts show up in practice, see how to spot hidden commissions and conflicts.
When can a commission beat an AUM fee?
Commissions are not automatically predatory, and AUM fees are not automatically pure. For some annuity or insurance needs, a transparent, one-time commission can cost less over a holding period than wrapping the same product inside an ongoing advisory fee.
Our approach at Martino Capital:
- We act as a fiduciary.
- We do not take commissions or hidden kickbacks on annuity products unless that structure benefits the client.
- 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).
The test is always the same: total client cost, clarity of incentives, and whether you would still get the recommendation if the payout disappeared. For a deeper education walkthrough of that comparison — including the no-double-dip rule — see annuities: when a transparent commission can beat an AUM fee.
A one-page comparison for any adviser
Before you fund an account, ask for a single page that covers:
- How you are paid (AUM, retainer, commission, or mixed — with dollar estimates)
- Who manages assets daily (your firm’s team vs. a third-party platform)
- How many fee layers exist
- Any product incentives (no kickbacks — or any commission disclosed and compared)
- What happens if you say no to the product
If the firm cannot produce that page, treat the silence as data.
How Martino Capital fits these labels
- Compensation: single transparent AUM-based fee for the standard relationship
- Kickbacks / layered manager fees: none on top of ours
- Portfolio management: direct, in-house — not handed to a TAMP (custodian/Black Diamond = tooling, not a handoff)
- Annuities / insurance: commission only when it benefits the client; fiduciary standard; cost comparison; plain disclosure if commission beats AUM; no double-dip
- Public filings: Form ADV on IAPD (CRD 329648)
FAQ
Is fee-only always better for high-net-worth clients?
Not always. Fee-only removes product-commission incentives, but you still need to check total cost, who manages the portfolio, and whether the fee buys real oversight. A disclosed commission that is cheaper than a multi-year AUM wrap can be better for a specific product.
Does “fee-based” mean I will be sold products?
It means the firm may earn commissions in addition to advisory fees. Ask for a written map of when they act as adviser versus agent, and what they earn in each mode.
Why do some RIAs still have conflicts if they charge AUM?
AUM does not eliminate soft dollars, revenue sharing, proprietary products, referral fees, or layered TAMP costs. Compensation type is one filter; disclosure quality and who manages the assets are others.
How do I verify what Martino Capital charges?
Ask us to put the fee, any product costs, and any commission scenario on one page. Then cross-check our Form ADV on IAPD.
What should I do next?
Call 303.771.4357 or use the contact page. We are phone-first — no online calendar. Bring any other firm’s fee one-pager; we will walk through it in plain English.
Disclaimer: This article is general education, not personalized investment, tax, or legal advice. Advisory services are offered only where Martino Capital is appropriately registered or exempt. Past performance does not guarantee future results. For current disclosures, see our Form ADV on IAPD.
Page reviewed September 2026 for clarity. This is educational information, not personalized investment advice.