There’s a shift towards a non-AUM fee model for advisory services, according to financial planning workflow platform AdvicePay.
The firm, founded in 2018 by financial advisors Michael Kitces and Alan Moore, has just surpassed 1 million financial planning fee transactions on its platform and says that reflects demand for non-AUM fee-for-service models.
“This milestone signifies that fee-for-service financial planning is not just a trend; it represents a significant revenue growth opportunity for advisory firms and enterprises. Advisors continue to explore and implement business models that go beyond assets under management to reach more next-generation consumers, and AdvicePay is at the center of this shift,” said CEO Alex Sauickie, adding that this is just the beginning for the firm.
AdvicePay was included on Inc.com’s list of fastest growing private American companies and has seen a 102% growth in advisors added to the platform, with transactions up 193%.
Co-founder Michael Kitces said the success has been providing a solution that advisors needed.
“At the time of AdvicePay’s launch, financial advisors didn’t engage in subscription fee models because they couldn’t; collecting a high volume of paper checks simply wasn’t scalable and gathering clients’ bank account information to bill them directly triggered custody issues,” Kitces said. “So we built AdvicePay to specifically solve for that problem: How to efficiently, compliantly, and scaleably expand their financial planning fees with recurring revenue beyond AUM.”
Kitces likened what the firm has done to the tech platform that Schwab Advisor Services launched in the 1990s, which enabled independent RIAs to be able to bill AUM fees at scale for the first time, catalyzing an entire shift in industry business models.
He believes his firm is well-positioned to drive the next big industry business model shift towards fee-for-service financial planning.
Rajesh Markan earlier this year pleaded guilty to one count of criminal fraud related to his sale of fake investments to 10 clients totaling $2.9 million.
From building trust to steering through emotions and responding to client challenges, new advisors need human skills to shape the future of the advice industry.
"The outcome is correct, but it's disappointing that FINRA had ample opportunity to investigate the merits of clients' allegations in these claims, including the testimony in the three investor arbitrations with hearings," Jeff Erez, a plaintiff's attorney representing a large portion of the Stifel clients, said.
Chair also praised the passage of stablecoin legislation this week.
Maridea Wealth Management's deal in Chicago, Illinois is its first after securing a strategic investment in April.
Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.
Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.
