Issue link: https://resources.envestnet.com/i/1528375
Executive summary Personalized advice starts with understanding the client's goals. Financial planning technology has revolutionized the advisor-client relationship by offering a platform with foundational to sophisticated planning and actionable insights to bring a financial plan to life for clients. During times of volatility, proactively reviewing a client's plan can help to make daily fluctuations less scary, allowing them to focus on the long-term picture. By giving clients the opportunity to evaluate decisions, or tradeoffs if necessary, advisors become the central point of contact, providing a high level of personalized service during times of change. Other opportunities to proactively engage clients could involve segmenting those clients nearing retirement. For example, you can identify new account opportunities, pension strategies, or potential tax savings strategies. Equipped with the tools needed to deliver personalized advice for clients at every stage of their financial journey, advisors use a wide range of fee models when charging for their planning services. Plus, we recognize planning is not a one-time event; it is ongoing. So how does the industry view these activities and what do they charge? With these questions in mind, we wanted to explore how financial planning fees have changed in the industry. Envestnet MoneyGuide conducted a web-based survey in 2023 and received 600 responses from sources that represented a range of advisors, from Registered Investment Advisors to Independent Broker Dealers and financial service firms. This study explores those results and how they may influence how advisors charge for their services. Matt Wilson Head, MoneyGuide Business Strategy Key highlights Level of planning has expanded. 52% of advisors provide both comprehensive and modular planning—a 9% increase since 2020. 1 More advisors are charging for plans than ever before. Advisors that do not charge a fee for planning dropped significantly—down from 28% in 2020 to 10% in 2023. 2 More concern over regulatory requirements driving up costs and reducing access to quality advice. In 2024, 49% were concerned vs. 44% in 2020. 4 Rise in fee collection via custodian. 27% increase in fees being collected directly from accounts they manage via custodian. 3 Top 3 factors that are driving planning software purchase decisions: Client experience capabilities, cost, and account aggregation. 5 2 FOR HOME OFFICE AND ADVISOR USE ONLY. NOT FOR DISTRIBUTION TO THE PUBLIC.