XY Planning Network payment tool now available for all fee-based planners

Michael Kitces and Alan Moore want paying for financial advice to be as easy as Netflix subscription

Jan 22, 2018 @ 7:00 am

By Ryan W. Neal

If consumers can automatically pay their Netflix or Amazon Prime subscriptions each month using a credit card, why can't they do the same for financial planning?

That's the questions Michael Kitces and Alan Moore, co-founders of the XY Planning Network, are trying to solve with AdvicePay, a compliant payment processing tool for independent financial advisers.

(More: XY Planning Network launches TAMP for young investors)

AdvicePay lets advisers bill and collect payment directly from a client's credit card or bank or brokerage account via Automated Clearing House (ACH) transfers. Using a digital portal, clients can input payment information, set up automatic recurring payments, review invoices and confirm any billing changes.

The pair worked with regulators to ensure the tool is compliant with RIA custody regulations, and even includes features regulators asked that aren't necessarily law, Mr. Moore said. For example, it allows clients to easily cancel a subscription.

"We did not want this become a gym membership model where it's impossible to cancel," Mr. Moore said.

AdvicePay also tracks the information to assist an adviser in the case of an audit.

The two designed AdvicePay based on their personal experience consulting retainer-based financial advisers in the XY Planning Network. They couldn't find anything else on the market because the universe of fee-based financial planners is too small for most technology developers, Mr. Moore said.

The tool was first announced at the 2016 XYPN Conference and released a year later in beta for members of the network.

Now Mr. Moore and Mr. Kitces are making AdvicePay available to all financial advisers for a fee of $50 per month, plus 3.5 percent fees on credit card transactions and 1.5 percent fees for ACH.

"We would have loved to launch this sooner, but we were definitely in beta and working out the kinks," Mr. Moore said.

Network members will have the $50 monthly fee waived and will get discounted rates on transactions, but Mr. Moore said the product is open to all advisers and they are exploring other enterprise partnerships with adviser networks and financial institutions.

(More: Tailor advisory fees to each client's needs)

"Ultimately, the industry is moving in this direction," Mr. Moore said. "Monthly retainers or quarterly fees will be the number-one way that financial planners will get paid for doing financial planning."

Not only does he hope tools like AdvicePay will make it easier for advisers to incorporate fee-based planning into their practice, Mr. Moore says this model will open financial advice to consumers without enough assets to afford an AUM model.

"Not everyone can pay $100 a month for financial planning, but a heck of a lot more can pay $100 a month than have the assets to support an AUM model," he said.

"What we see is a long-term bifurcation of fees. AUM will continue to be the dominant way people get paid for investment management, and fees will pay for financial planning," Mr. Moore added. "AdvicePay allows advisers to build a fee structure that works for their client base."


What do you think?

View comments

Recommended next


Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting investmentnews.com? It'll help us continue to serve you.

Yes, show me how to whitelist investmentnews.com

Ad blocker detected. Please whitelist us or give premium a try.


Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print