DECA Financial Consulting Practice Exam 2025 - Free DECA Financial Consulting Practice Questions and Study Guide

A fee-only financial advisor is characterized primarily by the way they earn their compensation, which is exclusively through fees paid directly by clients. This structure allows for transparent pricing, as clients know exactly what they are paying for the advisor's services without hidden costs or commissions that could create conflicts of interest.

Fee-only advisors typically provide a range of services that may include financial planning, investment management, and retirement planning, focusing on the best interests of the client without the pressure to sell specific financial products. This model is beneficial for clients as it aligns the advisor's incentives with their interests, as the advisor is motivated to provide quality advice rather than pushing products.

The other options refer to different compensation structures or service types that are not exclusive to fee-only advisors. For example, options involving commissions or hourly rates may still involve conflicts of interest or a combination of fees that don't strictly adhere to the fee-only definition. Thus, the correct identification of a fee-only financial advisor is indeed one that charges fees directly to clients without additional compensation through product sales or other means.