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.
“Today is as big a moment as I have seen in my career,” says Shirl Penney of Dynasty Financial Partners.
TradePMR's Scott Victoria says Robinhood Advisor Network's 25% revenue fee model better serves advisors than basis-point pricing in other RIA client referral programs.
Built in partnership with Dynasty Financial, Schwab, VanguardClaude for Financial Advisors links custodians, CRMs and planning tools for advisor workflows
New benchmarking tool ties advisor pay structures to ownership and succession as the industry faces a widening talent gap.
Arca becomes the first firm to build on Altruist's Realtime Custodial API, deepening a partnership tied to its rapid tech-led growth.
Northern Trust’s Ken Lassner shows advisors how to convert volatility into after-tax portfolio gains
Dan Biagini of American Equity says the steady decline of pensions, longer lifespans and a reset in interest rates are rewriting how advisors build retirement income
