12.09.20

Advisors Are Adopting Fee-for-Planning Models — and Charging Accordingly

by: Nicole Casperson

An Envestnet MoneyGuide study has found that 72 percent of 1,600 surveyed advisors have adopted a fee-for-planning model. Nearly 38 percent of advisors are charging a separate fee for planning services, and 32 percent charge via AUM. The same study found that clients are more likely to use financial plans than in years past. Fifty-five percent of advisors said clients are demanding more comprehensive planning (46 percent) compared with modular planning (11 percent). The study also found that increased demand for planning has caused fees to rise as well. The flat fee average has increased from $1,696 in 2015 to $2,482. Hourly fees have risen from $208 in 2015 to $257. President of Envestnet MoneyGuide Tony Leal said, “We are seeing an increase in the number of clients with a plan along with the steady rise of fees; this suggests there is a demand for advisors to offer and expand their financial planning services and clients are willing to pay for it."

Read the full article on InvestmentNews.