Signs Your Advisor Is Working for Commission

Kimberly Green | 2026-03-14

5 Signs Your Financial Advisor Is Working for Their Commission — Not for You Most people assume their financial advisor is on their side. That's a reasonable assumption. It's also not always true. The financial advisory industry has a compensation problem. Many advisors earn commissions when you buy certain products—insurance policies, annuities, mutual funds with sales loads. The commission comes from the product provider, not from you directly. Which means the advice to buy that product is not necessarily a vetted advice for your situation. It's the advice that generates a payment. This isn't a conspiracy. It's a structural conflict of interest built into how a significant portion of the advisory industry gets paid. And it shows up in specific, recognizable patterns. Sign 1: They Recommended an Annuity Without a Detailed Explanation Annuities are not inherently bad products. For some people in some situations, they make genuine sense. But they are also among the highest-commission products in financial services—often paying advisors 5% to 7% of the invested amount upfront. On a $300,000 investment, that's $15,000 to $21,000 in commission paid by the insurance company. That commission gets recovered through higher product fees, surrender charges, and features that benefit the insurer more than the investor. A fee-only fiduciary advisor can recommend an annuity—but they don't earn a commission if you buy one. Their incentive is to recommend it only if it genuinely fits your situation. A commission-based advisor has a $15,000 reason to recommend it regardless. The tell: if your advisor recommended an annuity without walking you through exactly how it's structured, what the fees are, what the surrender period is, what alternatives were considered, and why this product specifically fits your situation—the explanation may have been incomplete by design. Anthony Syracuse at Dynamic Financial Planning, a fee-only fiduciary on Sam's List, accepts no commissions on any products. When he recommends something, the recommendation isn't funded by the company selling the thing. Sign 2: Your Portfolio Is Full of High-Expense Mutual Funds Expense ratios are the annual cost of owning a mutual fund, expressed as a percentage of assets. A low-cost index fund might have an expense ratio of 0.03% to 0.10%. An actively managed fund might charge 0.75% to 1.50%. Some funds charge even more. The difference sounds small. On a $500,000 portfolio over 20 years, the difference between 0.05% and 1.2% in annual expenses compounds to roughly $150,000 to $200,000 in lost returns. That...