An increasing share of advisors are using subscription based models for financial planning advice, according to a new report.
Last year 85% of invoices issued by advisors were for subscription advice services, up from 83% in the previous year, the analysis of 461,000 transactions by AdvicePay discovered for its third annual Fee-for-Service Industry Trend Report.
The trend towards subscription models comes alongside a change in consumer behavior with most fees (53.4%) paid using credit or debit cards in 2024 and 45.9% paid by ACH transactions.
The report also found that, rather than replacing AUM based fees, subscriptions are an additional revenue stream for advisors and one that provides a more predictable and stable income to hedge against volatility in market conditions which impact AUM based fees.
And the fees charged on a fee-for-service basis have also increased. In 2024, advisors raised their average monthly subscription fees to $278, up 4.9% from $265 in 2023, while quarterly subscriptions saw a 1.4% increase, and one-time fees grew by 2.9%.
Adoption of the fee-for-service model is no longer a niche trend, it’s a strategic necessity for broker-dealers and RIAs aiming to remain resilient and competitive in recruitment and retention of both advisors and clients,” said Alan Moore, Co-Founder and CEO of AdvicePay. “The sustained growth across key metrics signals that subscription-based planning is becoming a core part of financial advisory firms’ revenue strategies. It allows firms to expand their client base, offer flexible pricing, and mitigate the risk of market volatility.”
The firm has processed over $838 million in financial planning fees since its public launch in 2018, firmly establishing fee-for-service financial planning as a mainstream and essential business model, which has is reinforced by a recent report from Cerulli Associates, which projects more than three-quarters of financial advisors will operate under a fee-based compensation model by 2026.
InvestmentNews traveled to Boston, Massachusetts, to cover Schwab's annual conference. All coverage can be found here.
“We’re actually seeing an escalation in M&A activity,” said Eric Godes of FP transitions.
“There is an increasing need for tax expertise,” said Dave Wahlen of Merit Financial Advisors.
At IMPACT, CEO Rick Wurster said Schwab Wealth Advisory serves only existing retail clients, and he pledged support for sub-$100M RIAs as Fidelity drops them.
“A better tool does not on its own make a better outcome,” said Humanity Labs CEO Andrei Pop.
Knighthead Life entered the market with a competitive MYGA. A strong launch earned advisor confidence and paved the way for FIAs.
As AI makes financial information more accessible than ever, Lana Hock explains why human judgment, trust, and empathy remain the qualities clients value most in a financial advisor
