Financial Advisors See Higher Fees for Fee-Based Planning Services

Financial advisors saw a notable increase in the fees they could charge clients for fee-based financial planning services in 2023, according to the 2024 Fee-for-Service Industry Trend Report from AdvicePay. The report’s data shows that monthly recurring subscription fees rose to an average of $265 per client, up 6% from the previous year. Quarterly recurring subscriptions averaged $968, a 1.6% increase.

One-time planning fees also climbed, reaching an average of $1,578 per client – a 6.7% jump compared to 2022. The report highlights the continued preference among advisors for subscription-based models, with 83% of invoices processed through AdvicePay being for subscriptions and 74% representing monthly recurring charges. Half of advisors bill clients monthly, while 22% opt for quarterly billing.

According to Alan Moore, Co-Founder and CEO of AdvicePay, ‘We continue to find that there are more consumers looking for financial planning than there are financial planners to provide that fee-for-service offering. What’s more, the retention rates are extremely high in an ongoing financial planning relationship, and the latest data show that the economics continue to be very favorable.’

The trend aligns with research from Cerulli Associates and the Securities Industry and Financial Markets Association, which found that 63% of investors are now willing to pay for advice – a significant increase from 38% in 2009. The study also revealed a heightened demand for personalized, comprehensive advice, with 54% of investors seeking formal financial plans, up from 38% 14 years ago.

In addition to fee-based planning, most advisors offer other services, such as investment management (88.4%) and tax planning (82.1%). An increasing number (63.1%) are also providing guidance on held-away accounts like 401(k)s. To receive a copy of the full 2024 AdvicePay Fee-for-Service Industry Trend Report, visit the provided link.

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