---
title: The Truth About Advisor Compensation
description: Is it better consumer value to pay financial advisors through commissions or fees on assets?
image: https://blog.stonewoodfinancial.com/hubfs/AdvisorCompensation.png
---

** Menu

![Stonewood](https://blog.stonewoodfinancial.com/hs-fs/hubfs/Stonewood-Financial_June2017-Theme/Images/mobile-logo.png?width=120&height=52&name=mobile-logo.png)

[![Stonewood Financial Logo](https://blog.stonewoodfinancial.com/hs-fs/hubfs/logo-1.png?width=175&name=logo-1.png "Stonewood Financial Logo")](https://www.stonewoodfinancial.com)

[Customer Login](http://app.stonewoodfinancial.com/login.php)

## Stonewood Financial Blog

### The Truth About Advisor Compensation

Posted by [Neil Wilding](https://blog.stonewoodfinancial.com/blog/author/neil-wilding) on October 23, 2017 at 12:49 PM

![](https://blog.stonewoodfinancial.com/hubfs/Neil_Web.jpeg)

Find me on:

[LinkedIn](https://www.linkedin.com/in/neil-wilding-4592572/) [Twitter ](https://twitter.com/neil_wilding)

- [Tweet](https://twitter.com/share)

![AdvisorCompensation.png](https://blog.stonewoodfinancial.com/hs-fs/hubfs/AdvisorCompensation.png?width=180&name=AdvisorCompensation.png)We all agree financial professionals should get paid for their work. But our industry is torn over *how* we get paid.

It’s a long-standing question: Is it better consumer value for advisors to be paid through commission on the products they sell, or through fees on the funds they manage?

With the recent DOL regulations and increasing regulatory scrutiny, the question is growing in prominence.

We won’t rehash the debate today, but we will share an interesting insight we’ve had here at Stonewood.

One of our members recently sold an IUL policy to a 43-year old client of his. The IUL policy paid the advisor a commission of around $14,000.

We got to wondering… what would the advisor make if he managed that money in an IRA for the client instead?

So we did a quick calculation. Assuming the advisors charged 1% on the funds, and the client lived to age 90, the approximate advisor revenue from a managed account would have been…

$170,000

Pretty astonishing, right?

Here’s the bottom line: There are situations where a client is better served by IUL, and situations where a client is better served by a managed account. And when an advisor acts in the best interest of his client, that advisors has earned payment for his work either way.

But the old belief that commissions are the richest compensation? That certainly belongs in the dustbin of outdated assumptions.

## Stonewood Insights

### Simple. Powerful. Meaningful.

Welcome to our corner of the internet.

You've found the place advisors go for insight, education and "never-thought-of-that-before" moments.

If you're ready to grow your practice with IUL, Stonewood is ready to help.

 

### Subscribe to Email Updates

### Recent Posts

[![Share on Facebook](https://static.hubspot.com/final/img/common/icons/social/facebook-24x24.png)](http://www.facebook.com/share.php?u=https%3A%2F%2Fblog.stonewoodfinancial.com%2Fblog%2Fthe-truth-about-advisor-compensation%3Futm_medium%3Dsocial%26utm_source%3Dfacebook) [![Share on LinkedIn](https://static.hubspot.com/final/img/common/icons/social/linkedin-24x24.png)](http://www.linkedin.com/shareArticle?mini=true&url=https%3A%2F%2Fblog.stonewoodfinancial.com%2Fblog%2Fthe-truth-about-advisor-compensation%3Futm_medium%3Dsocial%26utm_source%3Dlinkedin) [![Share on Twitter](https://static.hubspot.com/final/img/common/icons/social/twitter-24x24.png)](https://twitter.com/intent/tweet?original_referer=https%3A%2F%2Fblog.stonewoodfinancial.com%2Fblog%2Fthe-truth-about-advisor-compensation%3Futm_medium%3Dsocial%26utm_source%3Dtwitter&url=https%3A%2F%2Fblog.stonewoodfinancial.com%2Fblog%2Fthe-truth-about-advisor-compensation%3Futm_medium%3Dsocial%26utm_source%3Dtwitter&source=tweetbutton&text=The%20Truth%20About%20Advisor%20Compensation) [![Share on Pinterest](https://static.hubspot.com/final/img/common/icons/social/pinterest-24x24.png)](http://pinterest.com/pin/create/button/?url=https%3A%2F%2Fblog.stonewoodfinancial.com%2Fblog%2Fthe-truth-about-advisor-compensation%3Futm_medium%3Dsocial%26utm_source%3Dpinterest&media=)

© 2021 Stonewood Financial

[Privacy Policy](https://www.iubenda.com/privacy-policy/46545157)

For financial professional use only.  
 The information provided herein is the exclusive property of Stonewood Financial Tools and is protected by copyright and other intellectual property laws of the United States. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice.