Shift toward fee-based models accelerates among independent advisors

Independent financial advisors are responding to shifts in pricing expectations and client service demands by revising their fee structures and expanding their offerings, according to new research from Cerulli Associates.

The second-quarter issue of The Cerulli Edge—US Advisor Edition highlights how fee compression and changing investor demographics are reshaping advisory practices. Advisors are under pressure to provide more value while keeping costs competitive, especially for high-net-worth (HNW) clients and younger generations who are accustomed to flexible, transparent pricing.

Cerulli finds that by 2026, 54% of financial advisors expect to derive at least 90% of their revenue from advisory fees—up from 44% in 2024. At the same time, the number of advisors relying on mixed fee-and-commission models is projected to decline significantly. This marks a continued shift away from transactional models toward fee-based planning and relationship-driven service.

“As fee compression continues and a new generation of potential clients emerges, advisors need to adapt and evolve to meet changing expectations,” said Kevin Lyons, a senior analyst at Cerulli. “Clients—particularly HNW individuals—increasingly expect their advisors to provide more services beyond investment management.”

Evolving expectations in financial advice

While average fees have held steady, they are expected to decline slightly for the most affluent clients. By 2026, 83% of advisors anticipate charging less than 1% for clients with over $5 million in investable assets, with average fees for clients holding $10 million expected to drop to 66 basis points—nearly half the 125 basis points typical for those with $100,000.

Independent advisors are also leveraging nontraditional fee models—such as flat rates, hourly billing, and subscription fees—to reach clients across asset levels. One-time financial planning fees, which average around $1,929 for comprehensive plans, are increasingly used as entry points into ongoing relationships.

Cerulli’s report also notes that flexibility in fee structure is particularly important in competitive urban markets. For advisors targeting organic growth, offering varied fee options can help attract underserved clients and eventually transition them to full-service relationships as their wealth grows.

“The pressure to lower fees while simultaneously meeting clients’ growing demand for additional services creates a challenging environment,” Lyons noted. “Advisors who clearly define their processes, remain flexible in their fee structures, and adapt to offer a broader range of services will be better positioned to distinguish themselves.”

The findings emphasize that the future of advisory success lies in adaptability—both in how advisors charge and in how they serve.