2 out of 5 surveyed advisors made the changes to be more accommodating and flexible to meet clients where they are, according to latest Wealthramp report.
San Francisco, Calif. – Fee-only advisors are listening to consumers who say they want to pay differently. According to the quarterly advisor survey by Wealthramp, 57% of fee-only advisors surveyed said they now give their clients the option of paying flat fees, annual retainers or assets under management-based fees – or in many cases a combination of both. What’s more, two out of five (40%) said they changed or are in the process of changing their fee structure to accommodate client needs over the past 6-12 months.
“The financial advice industry is going through massive change, particularly around firm accountability and transparency. Consumers are more educated about the costs of working with an advisor, in large part because of information online and tools that make it easier for consumers to invest on their own,” said Pam Krueger, founder and CEO of Wealthramp. “ A growing number of people no longer desire or accept a client-advisor relationship defined by assets under management. They are more interested in advisors willing to collaborate with them and find a working relationship that makes sense for their budget and financial needs.”
Nearly seven out of 10 surveyed financial advisors said they made changes to their fee structures because of consumer demand and a desire to be more accommodating and flexible for clients. More than a third (39.5%) also said fees are “extremely or very important” for individuals when making a decision to hire an advisor. Only 4% reported that fee compression or competition in the industry was the primary motivator, suggesting that consumers are wielding the greater influence on pricing models today.
Other changes advisors are making include: adding subscriptions for financial planning services; offering a performance fee on stocks accounts; separating hourly fees from project or retainer fees to help prospects select the best advisor for their financial situation; and providing other alternatives for high income but lower-asset clients to work with them.
Between May 4-11, 2021, Wealthramp, an SEC-registered financial advisor referral service, polled more than 100 fee-only fiduciary advisors to understand how financial professionals are responding to new consumer expectations around fees and their outlook on what these new demands around fees singal about the future of advisor-client relationships.
Wealthramp is an SEC-registered referral service that connects consumers with rigorously vetted and qualified fee-only financial advisors. The company launched the only network of independent, fee-only fiduciary financial advisors expertly vetted by investor advocate Pam Krueger. Built on the foundation of consumer advocacy and transparency, Wealthramp screens out conflicts of interest and engages only with established fee-only fiduciary advisors who don’t sell products and work solely in the interests of clients. The Wealthramp network serves Americans nearing retirement as well as forward-thinking Gen X and Millennial consumers and consists of independent fiduciaries specializing in holistic financial planning, income strategies, stock-based compensation, special needs planning, and more.