Wealth Enhancement Group charging some new clients more for consulting

Wealth Enhancement Group charging some new clients more for consulting
Vance Barse, of Your Dedicated Fiduciary.
Decision comes at a time when financial advice industry is facing pressure to offer clients more services at a better price.
SEP 18, 2024

The giant hybrid registered investment advisor Wealth Enhancement Group, with $72 billion in client assets, last month revised its fee structure, increasing the high end the firm may charge clients for annual consulting to $50,000 from $25,000.

According to its Form ADV filed August 23 with the Securities and Exchange Commission, the increase is for Wealth Enhancement Group’s “flat-rate consulting fee.”

Most Wealth Enhancement Group clients pay an advisory fee, and there were no changes in the firm's advisory fee schedule. A small percentage of the firm's clients are charged the consulting fee. 

The change at Wealth Enhancement Group, which does business as an RIA with the name Wealth Enhancement Advisory Services, comes at a time when the broad financial advice industry and advisors are facing pressure to offer clients more services at a better price. Based in suburban Minneapolis and with a network of 85 offices, Wealth Enhancement Group recently has been a leading buyer of wealth management firms.

“Ongoing Financial Consulting Services are designed to help clients address their financial future,” according to the ADV. “Regular reviews of the client’s financial situation and financial goals shall be provided in frequency determined by the [Wealth Enhancement Group] financial advisor and the client.”

“The fee for services is agreed upon at the time of engagement,” according to the filing. “The hourly fee varies in a range up to $600, depending upon the complexity of services. The flat fee ranges from $250 to $50,000. The hourly or flat fee will be agreed upon at the time of engagement.”

A spokesperson for Wealth Enhancement Group declined to comment about the change in the upper range of the flat-rate financial consulting fee.

Financial advisors and industry observers saw the increase as the result of the expansion of services large firms like Wealth Enhancement Group offer.

“As RIAs and advisors expand to work with higher net worth clients and start to offer more of a family office service model, financial consulting fees should rise in tandem with the complexity of the client’s situations,” said Kay Lynn Mayhue, president of Merit Financial, another hybrid RIA.

“High-net-worth clients with more complex financial planning profile require more solutions,” said Vance Barse, founder and wealth strategist, Your Dedicated Fiduciary.

“Clients and cohorts are willing to pay for the advice and implementation of those services,” he said, adding that putting into place various kinds of trusts requires expertise and consumes time for the financial advisor as well as the client.

“RIAs will continue to be more flexible on fees based on services they provide than brokerage firms,” said Danny Sarch, an industry recruiter. “That includes legal work to estate planning. It runs the gamut.”  

“At the same time, clients increasingly want more flexibility on fees, with some customers looking to pay by the hour, as opposed to paying 1% on total assets,” he said. “Those clients are thinking, why should I pay my financial advisor differently from my attorney?”   

Latest News

Northern Trust names new West Region president for wealth
Northern Trust names new West Region president for wealth

The new regional leader brings nearly 25 years of experience as the firm seeks to tap a complex and evolving market.

Capital Group extends retirement plan services further with a focus on advisors
Capital Group extends retirement plan services further with a focus on advisors

The latest updates to its recordkeeping platform, including a solution originally developed for one large 20,000-advisor client, take aim at the small to medium-sized business space.

Supreme Court slaps down challenge to IRS summons for Coinbase user data
Supreme Court slaps down challenge to IRS summons for Coinbase user data

Crypto investor argues the federal agency's probe, upheld by a federal appeals court, would "strip millions of Americans of meaningful privacy protections."

Houston-based RIA Americana Partners adds $1B+ with former Morgan Stanley director
Houston-based RIA Americana Partners adds $1B+ with former Morgan Stanley director

Meanwhile in Chicago, the wirehouse also lost another $454 million team as a group of defectors moved to Wells Fargo.

Edward Jones to bring overlay management in-house with Natixis deal
Edward Jones to bring overlay management in-house with Natixis deal

The broker-dealer giant's latest acquisition agreement extends its push towards offering enhanced financial planning and investment management.

SPONSORED How advisors can build for high-net-worth complexity

Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.

SPONSORED RILAs bring stability, growth during volatile markets

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.