Aug 12
Is It Time to Disrupt Your Fee Model? by Angie Herbers - ThinkAdvisor
What You Need to Know
- Charging customers by the AUM model hit a speed bump in 2008-2009's bear market.
- What grew in popularity afterward was the use of the retainer fixed-based fee, or subscription, model.
- Today, this model could be the new disruptor, especially as the use of subscription-based services expands.
As advisors have moved more toward financial planning and away from investment management, the way they charge clients for their services has shifted.
Today, there are three primary ways independent financial advisors charge fees: a percentage of assets under management (AUM); flat fees for projects, like a one-time financial plan; and retainer-based fixed fees — or subscription fees — based on a client’s financial complexity.
