The financial advisory sector witnessed a significant uptick in the fees charged for fee-based financial planning services in 2023, as detailed in the 2024 Fee-for-Service Industry Trend Report by AdvicePay. This development underscores a broader industry shift towards subscription-based service models and reflects an increasing consumer readiness to invest in financial advice.
Monthly recurring subscription fees saw a 6% increase, averaging $265 per client, while quarterly recurring subscriptions rose by 1.6% to $968. One-time planning fees also experienced a notable 6.7% jump, reaching an average of $1,578 per client. The data from AdvicePay indicates a strong preference among advisors for subscription models, with 83% of invoices processed through the platform being for subscriptions, and 74% of these representing monthly recurring charges.
Alan Moore, Co-Founder and CEO of AdvicePay, highlighted the growing demand for financial planning services, noting the high retention rates in ongoing financial planning relationships and the favorable economics for advisors. This trend is supported by research from Cerulli Associates and the Securities Industry and Financial Markets Association, which found that 63% of investors are now willing to pay for advice, a substantial increase from 38% in 2009. Furthermore, 54% of investors are seeking formal financial plans, up from 38% 14 years ago, indicating a heightened demand for personalized and comprehensive advice.
Beyond fee-based planning, advisors are expanding their service offerings, with 88.4% providing investment management and 82.1% offering tax planning services. Additionally, 63.1% of advisors are now offering guidance on held-away accounts such as 401(k)s, reflecting the evolving needs of investors. For those interested in delving deeper into these trends, the full 2024 AdvicePay Fee-for-Service Industry Trend Report offers comprehensive insights.
