Fee-Only vs. Subscription-Based Pricing: Trends and Technology's Impact
RIAs must take a long-term view of pricing and billing for their services and adopt software that scales based on industry trends and overall growth.
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As recently as a decade ago, financial advisors made most of their income through commissions. They didn’t see the same client again unless there was another relevant product to sell.
Tired of the hamster wheel that is commission-based pay, advisors looked to build more lasting relationships with their clients. Financial planning is one way to do that. Combined with regulatory efforts such as the SEC’s Regulation Best Interest, commission-based fee structures are becoming far less desirable.
But as RIAs move toward fee-based pricing, consumers are dictating another shift. The modern consumer subscribes to about anything, including streaming services, rideshares, food delivery, and even coffee. Does such a system make sense in financial planning?
RIAs must take a long-term view of pricing and billing for their services and adopt software that scales based on industry trends and overall growth. This paper discusses those trends and how firms can prepare.