2023

FEE-FOR-SERVICEINDUSTRY TRENDREPORT

Prepared by AdvicePay
AdvicePay.com
Sales@AdvicePay.com

Table of Contents
3

A Letter From Alan Moore andMichael Kitces4

Fee-for-Service Subscription Growth
Trends5

System & Technology Trends

6

Engagement & Pricing Trends

7

How to Charge for Fee-forService Financial Planning

13

Market Trends

14

How Fee-for-Service Billing
Keeps Clients Fully Invested for
the Market Recovery

18

Client Acquisition & Marketing
Trends19

ADVICEPAY | FEE-FOR-SERVICE INDUSTRY TREND REPORT 2023

Scaling Fee-for-Service Into a
Revenue Center for Your Enterprise:
An AMA with Michael Kitces andAlan Moore

A Letter From Alan Moore and Michael Kitces
The future of financial advice will introduce significant opportunities tofinancial professionals that adapt to industry changes. Historically, financial
planning services were bundled into an assets-under-management fee ortied to the sale of investment products. But despite having income to pay
for financial planning, a majority of American households under age 64 do
not meet the minimum asset level, typically $250,000, required to qualify forplanning engagements.
2022 accelerated the need among investors to be able to access financial
planning services. With global stock market losses, record inflation, and theimpending generational transfer of wealth, next-generation clients are
eager to engage financial professionals, while advisory businesses seek ways
to grow sustainably and decouple revenue from stock market volatility. By
introducing a subscription model for fee-for-service financial planning, firms
can accelerate their growth by engaging the 90% of households who do notwork with a financial advisor.
For the first time, AdvicePay is sharing insights from the data generated byover 100,000 fee-for-service financial planning engagements — what
happened in 2022 and what opportunities exist for advisors in 2023. Review
the results from AdvicePay customers to discover how your business can
successfully implement and profitably scale fee-for-service planning.

In 2022, financial
professionals using
AdvicePay surpassed$300 million inlifetime fee-for-service
revenue processed
through the platform

Thank you for being part of AdvicePay's mission to help people live theirgreat lives. We can't wait to see how you expand your financial planning
revenue and the breadth of clients you serve in 2023!

-Alan Moore & Michael Kitces
ADVICEPAY | FEE-FOR-SERVICE INDUSTRY TREND REPORT 2023

3

Fee-for-Service Subscription Growth Trends
Nearly six of every ten Millennials want more financial advice than they
currently receive and are willing to pay for it. (1) Millennial and Generation
Z wealth grew 25% to $3.6 trillion in 2021 and are poised to benefit fromlong-term advisory relationships. Furthermore, Baby Boomers are moving
into retirement; by 2025, 75% of the workforce will be made up ofMillennials.
Ready to adapt to these industry changes, financial professionals who use
AdvicePay are implementing fee-for-service engagements to work withclients they may previously have turned away, or as an alternative tobilling clients based on assets under management (AUM). In 2022, 83% of
all invoices sent in AdvicePay were for subscription billing.
Charging clients on a subscription model provides many businessbenefits, enabling advisors to grow by targeting 90% of households notworking with an advisor. As the industry continues to evolve, financial
professionals want to ensure that their business keeps pace with industry
changes, including the growth of fee-for-service engagements.
1.Cerulli Edge—U.S. Retail Investor Edition, August 2022

Key Findings
IN 2022, 83% OF ALL INVOICESSENT IN ADVICEPAY WERE FOR
SUBSCRIPTION BILLING

73% OF ADVICEPAY USERS BILL
THEIR CLIENTS MONTHLY$

457% INCREASE IN SUBSCRIPTION-BASEDREVENUE FOR FIRMS IN YEARS 1-2 OF
IMPLEMENTING ADVICEPAY

3.2X

3.2X NET NEW ASSET GROWTH FOR
ADVISORS WHO CHARGE FOR FINANCIAL
PLANNING ADVICE IN ADVICEPAY

NNA

1750% INCREASE IN NEW SUBSCRIPTIONSACTIVATED FOR FIRMS IN YEARS 1-2 OF
IMPLEMENTING ADVICEPAY

The addressable market proliferates. To me that’s a big deal from an enterprise growth opportunity,
because it essentially means you get to start working with clients that are green fields, blue oceans, insteadof having everybody chasing the same number of households that have investments that are available tomanage, transferable, liquid, and willing to delegate. That’s only a pretty small segment of the marketplace.
So the technology enables the scalability, and the scalability says ok, now we can do this scalaby, let’s bringthis to market and see who we can serve, and off goes the growth with all the discussion of all the firms thathave doubled their planning fees in two years. - Michael Kitces, CFP®, Co-Founder of AdvicePay
ADVICEPAY | FEE-FOR-SERVICE INDUSTRY TREND REPORT 2023

System & Technology Trends
Historically, the complexity of management and compliance around feefor-service billing prevented firms from allowing financial advisors to

Key Findings

implement and scale fee-for-service financial planning, limiting planning to1060% INCREASE IN ADVISORS ADDED

just a small part of the businesses' revenue.

TO ADVICEPAY FOR FIRMS IN YEARS 1-2
OF IMPLEMENTING ADVICEPAYWith AdvicePay, firms have abandoned manual tracking by spreadsheets
in favor of automating the entire lifecycle of a fee-for-service engagement-- including the electronic signing of planning agreements, the issuance ofan invoice, secure payment processing, and supervision of the financial
plan delivery to the client – all in one centralized workflow.

THE TOP ADVICEPAY MODULES ADOPTED BY
ENTERPRSE FIRMS IN 2022 WERE DELIVERABLES,ONLINE CHECK DEPOST, AND ESIGNATURE

Implementing technology not only helps firms scale their financial

ON AVERAGE, FIRMS THAT HAVE ADOPTED ALL

planning workflows, technology is also an attractive advisor recruiting tool.

ADVICEPAY MODULES, COMPARED TO THOSE

In years 1-2 after implementing AdvicePay, firms experienced a 1060%

WITH NO MODULES ADOPTED, SAW 51% MORE

increase in advisors added to the platform.

ADVISORS ON THE PLATFORM IN 2022

The top AdvicePay Enterprise modules adopted by firms in 2022 wereDeliverables, Online Check Deposit, and eSignature. Firms that adopted
additional Enterprise modules experienced higher rates of advisor adoption
compared to firms that maintained their core workflow.

A lot of those advisors leave for a different firm thathas the platform. Many of our customers see
AdvicePay as a competitive advantage right now
because when they’re recruiting, they can say 'wehave a system to let you do financial planning.' That’s
enticing those reps to come over.
ADVICEPAY | FEE-FOR-SERVICE INDUSTRY TREND REPORT 2023

- Alan Moore, CFP®, CEO & Co-founder of AdvicePayEngagement & Pricing Trends
Fee-for-service pricing structures offer flexibility for both advisorsand clients. Pricing can be set using an hourly rate, the scope andcomplexity of a project, a factor of client income and net worth, ora fixed rate for all services.

In 2022, average pricing for one-time fee-forservice engagements was $1478, and subscription
engagements averaged $250 when billed monthly
or $953 when billed quarterly

According to Kitces.com research, financial advisors on averagecharge between 2-2.5% of client gross income for annual fee-forservice planning engagements.

$1,500

While double-digit percentage declines of the stock and bondmarkets in 2022 decreased advisor revenue based on assetsunder-management billing, advisor revenue for fee-for-service
engagements increased, maintaining pace with, or slightly
exceeding, the rate of inflation.

$1,000Monthly subscription pricing for all engagements on AdvicePay
increased 4.8% from 2021, and pricing for one-time payments
increased 8%. Just over one out of every three engagements
billed through AdvicePay was a subscription engagement.

When I engage with clients and families, our engagements
are relationship first, planning first, and that is how I pricemyself. Through the subscription model, my clients know I'm
focused on them, not just their investments.
-Bradley Hilton, Sonas Financial Planning

$500

$0

Monthly

Quarterly

One-Time

6

How to Charge for Fee-for-Service Financial
Planning
The financial services industry is constantly evolving, and one of the evolutions underway right now is the rapid
growth of the fee-for-service financial planning business model. For more than 80 years, financial professionals havebeen charging clients for investment and wealth advice under the Investment Advisers Act of 1940, but the methodsof how fees are calculated and collected for those services are expanding.
Experienced advisors are familiar with charging fees based ona percentage of client assets under management, but many
are uncertain how to appropriately charge fees for financial
planning services when clients do not want to pay, or are
logistically unable to pay, using the assets in their investment
accounts. Ready to adapt to industry changes, financial
professionals are implementing alternative pricing structuresand billing methods to support fee-for-service financial
planning engagements as a complement, or even an
alternative, to billing based on assets under management(AUM).
Keep reading to learn more about the several ways advisors
have adopted the fee-for-service business model in theirfinancial planning and wealth management businesses.

ADVICEPAY VS. OTHER
PLATFORMS
ADVICEPAY | FEE-FOR-SERVICE INDUSTRY TREND REPORT 2023

7

How to Charge for Fee-For-Service Engagements
There are three leading models emerging in how advisors charge for fee-for-service financial planning engagements. The
first model is the introduction of a new service line for clients who do not have investable assets to meet traditional AUM
minimums established by firms, or the clients’ investable assets are not suitable to be transferred to the firm’s institutionalcustodian (e.g. assets are held in active employer-sponsored retirement accounts or allocated to real estate and/or private
placement investments).
Offering a fee-for-service model expands access to the advisory firm’s financial planning services by removing theminimum asset requirement firms often enforce. This model is particularly appealing to young professionals, including
lawyers and physicians, as they generally have deferred long-term savings activity to support tuition and household
necessities during their education and training, but recently experienced a significant increase in income as they entered
the workforce as fully credentialed professionals.

AUM Fee Offset
The second emerging model is the establishment of a minimum financial
planning fee coupled with an offset to AUM fees. Under this model, advisory
firms establish a minimum financial planning fee applicable to all household
relationships, no matter how much in assets the household owns. In
conjunction with the minimum planning fee, the firm charges the traditional
AUM fee structure, which is typically 1% of AUM, with fee percentage
decreases as total household assets increase.
For example, a firm may select a minimum annual fee of $4,000 forcomprehensive financial planning services. Any client household with assets
below $400,000 (of which a 1% annual fee is $4,000) pays the minimum fee
under the fee-for-service billing model. When a client’s household assets
exceed $400,000, they transition to the AUM billing model, where apercentage of their account balance is periodically deducted to pay for theservices received.
ADVICEPAY | FEE-FOR-SERVICE INDUSTRY TREND REPORT 2023

Fee Repositioning
The third emerging model is one that can be considered under fee repositioning. In a fee repositioning model, firms
establish a higher minimum fee for fee-for-service financial planning services but reduce the annual percentage deductedfrom client assets under management for investment management services.
An example of fee repositioning would be a firm that establishes a minimum financial planning fee of $8,000, payable undera fee-for-service model, and then charges a separate annual AUM fee of 65 basis points on each household’s assets undermanagement. This AUM fee structure places the firm in a more favorable position for asset management services relative tothe average AUM fees charged across the industry, which tend to be around 95 to 100 basis points. However, the firm
repositions its value to clients by decoupling financial planning services from asset-based billing, and instead charges afixed, recurring annual fee that is clear and transparent to clients.

Identify Provided Services
No matter which fee-for-service model is implemented by afirm, advisors need to clearly identify and communicate services
rendered to clients. Internally, the firm can generate a library of
all services available to clients and the fees associated with each
item. During the proposal process, advisors can assess the
specific needs of each client’s household, select the appropriate
services most beneficial to the client, and then add up the
associated fees to arrive at a total fee-for-service engagement
amount.
In addition to individually matching services to client needs,
firms can establish tiered service offerings that match a bundleof services to the various life stages most clients encounter
through their financial planning journey. Learn more about thedetails of how to structure tiered service offerings.
ADVICEPAY | FEE-FOR-SERVICE INDUSTRY TREND REPORT 2023

LEARN MORE ABOUT CREATINGA CLIENT SERVICES CALENDAR

GUIDED TUTORIAL
How to Price Feefor-Service Financial
Planning
With Bill Winterberg, CFP®

GET ACCESS TO THE COURSE

Establish Pricing
One drawback to identifying a fee for each discrete service offered byan advisory firm is that it can be tedious to sort through dozens ofpotential service offerings and add up all of the associated fees. As analternative, some firms establish fee templates or calculators toautomatically generate a total fee amount based on the inputs
specific to the client household.
Some firms implement a fee calculator that uses a combination offactors based on the household’s annual income and net worth.
Others use a calculator that contains entries for a variety ofhousehold financial characteristics, including income, net worth,closely-held business interests, real estate holdings, private
investments, collectibles, and more. And as mentioned above, otherfirms choose to establish fees based on common tiers of services
bundled to match client life stages.
One of the most popular features of AdvicePay is the built-in fee
calculators, allowing advisors to select an appropriate fee structure
for each client’s financial planning engagement, enter the required
details about the client’s household and/or desired services, andAdvicePay outputs the total fee based on the parameters of thecalculator. Follow this link to read about the built-in fee calculators inmore detail.

Clients want clarity. They are willing to pay for someone tohelp them make sense of their complex financial lives.
Simplicity-in-understanding emerging from complexity-offacts is something that many people desire.
-Jeremy Curtis, Lightstone Wealth Planning Solutions, LLC

How to Implement Fee-For-Service Engagements
Before proceeding with any change to fee structures, financial professionals must first update the required disclosure
documents based on the firm’s registration status with FINRA, the SEC, or state securities regulators. With updated disclosure
documents in place, advisors can consider the following fee-for-service implementation strategies to introduce suchengagements to clients.

Day-Forward Approach
The first implementation strategy for fee-for-service businessmodels is the day-forward approach. In the day-forward
approach, all new clients that engage the firm for financial
planning services are charged under the fee-for-service model.
Existing clients remain under the existing fee structure until
they are engaged to transition to the fee-for-service model orthey terminate their relationship with the firm.

Firm-Wide Approach

Annual Review Conversion

The second implementation strategy is the firm-wide
conversion. In this strategy, all households with active planning
engagements are notified of the firm’s plans to convert to a
new fee model. Clients should receive notification well inadvance of the planned conversion, along with details of fees
under their current engagement and an illustration of theirfees under the proposed conversion. Clients then have theopportunity to agree to the new fee structure, or choose toterminate their engagement with the firm should they decide
the proposed fee structure would not be a good fit. Clients who
agree to the new fee structure are then automaticallyconverted on the date indicated during the notification
process. Depending on the number of households served by
the firm, a firm-wide conversation may require a significant
level of effort to implement.

Finally, another implementation strategy to consider is theannual review conversion process. Many firms follow anannual review cycle when scheduling client meetings, so
as each household participates in its annual meeting, firms
can introduce the proposed fee-for-service model during
the meeting agenda along with a timeline for
implementation. Like the firm-wide conversion, all clientsare intended to participate in the fee-for-service model,
but in this strategy, clients are not transitioned on thesame day. Instead, the fee-for-service model is rolled out
gradually, which reduces the burden of transitioning alarge number of clients simultaneously, but it does stretchout the transition timeline which may require additional
attention to detail in which fee structure a clientparticipates and when that household is scheduled totransition to the fee-for-service model.
11

ADVICEPAY | FEE-FOR-SERVICE INDUSTRY TREND REPORT 2023

Here Are Some Engagements Financial Advisors Can
Provide Under the Fee-For-Service Model:
1. Insurance Double-Check: Under a fee-for-service engagement, you
can review your clients’ insurance policies, including homeowners or
renters, vehicles, recreational equipment, and umbrella policies.
2. Tax Reduction Strategies: You can help clients by identifying how
much salary to contribute to an employer-sponsored retirement
plan, whether a Traditional or Roth IRA makes the most sense, how
to make the most of an HSA plan eligibility, identifying deductions toeither accelerate or delay in the current year, funding strategies for
an FSA, and more.
3. Financial Organization: You have an opportunity to provide clients

GUIDED TUTORIAL

Services You Can
Provide Under theFee-for-Service
ModelWith Bill
Winterberg, CFP®

with a financial organization engagement under the fee-for-service
model and help make sense of all the financially-related information
used by the household.
4. Preparing for College: While short-term inflation is making
headlines this year, families with children are no strangers to therapidly rising costs of college and higher education over many years.
Another fee-for-service engagement well suited for such families ispreparing a plan to fund tuition, room and board, and other expenses
related to education beyond high school.
These engagements just scratch the surface of all the opportunities
that exist to provide valuable services to households seeking advice.

SIGN UP TO GET ACCESS

Learn more about the different services you can offer your clients.
ADVICEPAY | FEE-FOR-SERVICE INDUSTRY TREND REPORT 2023

12Market Trends
The Increasing Demand for Real Financial Planning
Tides of change also bring tides of big opportunities.
2022 presented unique economic challenges, with losses in both equities and bonds, combined with rapid increases in inflationand interest rates. Clients responded by increasing their demand for real financial planning beyond investment management. A
recent report from Cerulli expects 82% of financial advisors' clients to receive financial planning in 2023, a jump from 75% in 2022.
Now is the time for firms and financial professionals to embrace change, adopt new technology, deliver real value to clients, andimplement new streams of revenue. Adding fee-for-service financial planning engagements to your business allows you toprovide the services clients are seeking, while simultaneously creating a predictable recurring revenue stream that is not tied to
the volatility of the stock market.

Inflation & Adapting Pricing
The year-over-year inflation rate for the United States exceeded 6.45%
for the period ending December 2022. Automatic price increases, or
price escalations, can be a great solution to maintain consistent profit
margins as your business grows.
In 2022, financial advisors using AdvicePay increased their average
prices, generally keeping pace with inflation. Monthly subscription
pricing increased 4.8% from 2021, and one-time payments increased
8%.

How Financial Advisors using AdvicePay
Plan to Adjust Their Pricing in 2023
No Change

Increase 1%-4%

Increase 5%-9%Fee-for-service engagements provide increased transparency forclients as they consider the value of the services they receive. With
clearer expectations in mind, clients are willing to pay reasonable pricefor their financial planning. Research shows that reasonable pricing is
between 2-2.5% of your clients' annual gross income.
ADVICEPAY | FEE-FOR-SERVICE INDUSTRY TREND REPORT 2023

Increase 10% or more

0%

20%

40%

60%

13

How Fee-for-Service Billing Keeps Clients
Fully Invested for the Market Recovery
Stock market declines are a part of the long-term investing process, and unfortunately, nobody can consistently
predict when and by how much the next significant drawdown will be.
Financial professionals encourage long-term investors with prudent advice to remain focused on the long term andresist reacting impulsively to day-to-day market volatility, helping investors avoid selling when the market is low andsubsequently buying higher after a market recovery.
However, investment portfolios from which ongoing investment advice fees
are debited could be forced to sell investments during the middle of a market
decline in order to raise sufficient cash to cover their fees. Not only does thisaction result in the sale of a portion of long-term investments when prices are
low, but it also sustains a small but non-trivial level of cash drag to theportfolio’s overall performance, as a percentage of the portfolio’s balance istypically held in cash to pay for ongoing investment management fees.
Both investors and financial professionals want to keep long-term portfolios
fully invested at all times, allowing the entire portfolio balance to benefit fromthe market’s eventual recovery and subsequent appreciation over a longterm time horizon. One solution aligned with this long-term investment
principle is to implement fee-for-service billing paid for by using accounts
and assets that are separate from an investor’s long-term investment
portfolio, and this is a solution that financial professionals can implementwith AdvicePay.

ADVICEPAY | FEE-FOR-SERVICE INDUSTRY TREND REPORT 2023

BILL WINTERBERG, CFP®, VP OF
FINANCIAL PLANNING GROWTH

14

Sell Low, Buy High?

Cost of Cash Drag

One of the more well-known adages in investing is “buy low,sell high,” where investors take advantage of short-term
declines in the stock market to purchase additional
investments, hold the investments for decades, andeventually sell them after multiple periods of significant
growth and appreciation.

In a July 2022 informal poll on LinkedIn by Michael Kitces, themajority of over 1,000 advisor respondents indicated thatthey maintain between 1% and 2% of client portfolio
allocations in cash in order to pay for ongoing investment
management fees. This allocation to cash introduces cash
drag to the portfolio, which is another way the portfolio’s
long-term total returns are decreased, especially for investors
who plan to remain invested over three or four decades.

When financial professionals deduct ongoing investment
advisory fees from client portfolios, cash allocations canoften be insufficient to cover the advisory fees, especially in
portfolios where dividends are not received in cash or there
are no regular cash contributions added by clients into theportfolio. Therefore, advisors will sell a portion of theportfolio’s investments to raise cash to pay investment
management fees. However, if the need to raise cash occurs
during the middle of a recession and a bear market, theadvisor’s activity contradicts the “buy low, sell high” adage
by selling investments during a period when they are low!
Investments that are sold to raise cash to pay fees are rarely,
if ever, reinvested back into the portfolio. As a result, theportfolio does not fully participate in the subsequent
recovery and bull market phase of the investment cycle,
decreasing the portfolio’s future total returns and lowering
the odds of meeting clients’ anticipated financial outcomes.
As an alternative, financial advisors can adopt fee-for-service
billing models, where fees are paid with client cash flow orassets outside of long-term investment accounts, and avoid
selling investments during the depths of a bear market.
ADVICEPAY | FEE-FOR-SERVICE INDUSTRY TREND REPORT 2023

In addition, cash has the lowest expected returns of all
investment assets, with brick-and-mortar banks paying
interest around a meager 0.05% per year. Money market
funds have higher seven-day SEC yields than cash, currently
yielding around 1.5% to 2.0% as of early August 2022. But withthe year-over-year inflation rate for the United States
exceeding 6.45% for the period ending December 2022, cash
is rapidly losing its purchasing power, causing savers toexperience a real negative return on cash!
Finally, most investors that hold mutual funds and ETFs
already have a few percentage points of their portfolio
allocated to cash, simply due to the cash holdings inside thefunds they already own. According to Morningstar, Inc.,
across the universe of U.S. equity funds, the average cash
weighting of the holdings in mutual funds is around 3.2%.
Maintaining an additional one to two percent of theportfolio’s balance in cash set aside to pay fees could increase
the entire portfolio’s total cash allocation by 30 to 60%.
Client pricing must be focused on driving client outcomes. I chose fee-forservice to align my value with my client's stated outcomes with focus on
aspects under our control. My firm's revenue is a function of the guidance
offered, rather than the performance of the financial markets-Erik Nero, First Step Wealth Planning, LLC.

Implement Fee-For-Service Billing

AdvicePay Supports AUM Fees

With the increased adoption of fee-for-service financial
planning and investment management, advisors are able
to avoid the drawbacks of forced investment selling tocover fees in the midst of a recession, as well as reduce thelong-term effects of cash drag in client portfolios. Fee-forservice billing allows advisors to invoice clients directly for
financial services, and clients have the flexibility tocompensate their advisor using their payment method of
choice… from a bank account outside of their managed
portfolio.

Just because fees are paid using assets that are not a part of theinvestment portfolio doesn’t mean that advisors must abandon
fee calculations based on a percentage of assets undermanagement. All plans of AdvicePay include a fee calculator toolthat advisors can use to calculate fees based on a variety of
inputs, including a household’s assets under management or net
worth value.

Once a fee-for-service billing agreement is in place, assets
allocated in long-term portfolios can remain invested overmultiple economic cycles and no longer need to be sold togenerate cash needed to pay for fees. And since fees are
no longer debited from investment accounts under feefor-service billing, portfolios no longer need to maintain an
allocation of a few percentage points in cash that isreserved to pay for recurring fees, significantly reducing
cash drag.

ADVICEPAY | FEE-FOR-SERVICE INDUSTRY TREND REPORT 2023

Advisors can gather relevant data regarding a client’s assets or
net worth and use the information to generate a one-time invoice
for the client. The process of creating one-time invoices for clientsis not very scalable, so advisors with a growing number of clients
paying AUM fees with AdvicePay may want to consider morestreamlined approaches to invoice generation.
AdvicePay supports multiple one-time invoice generation by
uploading a CSV-formatted document that contains client email
address, invoice description, due date, and total fee amount.
Generating invoices through a bulk process is much morescalable, so advisors serving dozens or hundreds of households
that pay AUM fees with cash flow or other non-invested assets will
benefit from AdvicePay plans that support this feature.
Some AdvicePay users leverage third-party portfolio accounting
or billing software to perform detailed fee calculations on assets
under management, such as calculating the average dailybalance of a portfolio over a specific time period or aggregating
accounts among multiple client generations in order to qualify for
AUM fee breakpoints. Again, the results of those fee calculations
can be exported or copied into a CSV-formatted document for
streamlined invoice generation inside AdvicePay .

Panoramix Integration
One of the most recent AdvicePay integrations was withPanoramix portfolio management and accounting software.
Panoramix users can calculate fees for clients using customized
fee schedules established in Panoramix, and then automaticallysend the fee data through the AdvicePay integration to generateinvoices that reflect the fee calculations from Panoramix. Not only
does this allow clients to pay investment management fees using
their payment method of choice, but Panoramix includes the fee
transactions in the client’s portfolio activity so that performance
reports reflect the true, net-of-fees performance results.

Fee-For-Service Keeps Clients Fully
InvestedLong-term investors acknowledge that it is necessary to assume acertain level of risk in a portfolio in order to be rewarded withgrowth in the value of invested assets over time. Unfortunately, no
one knows when the stock market will experience a significant
decline, so investors should be prepared to hold their investments
for the long term and resist the temptation to sell when asset
prices are low. Financial professionals should also support clients’long-term investment goals by avoiding the sale of investments
during market declines in order to raise cash for fees.
Implementing AUM billing paid for using assets outside of longterm investment accounts avoids the forced sale of long-term
investments during market declines and also decreases thenegative impact of cash drag within a long-term portfolio.
ADVICEPAY | FEE-FOR-SERVICE INDUSTRY TREND REPORT 2023

To determine how AdvicePay canbe used for your firm’s AUM billing,
talk to a member of our team.

SPEAK TO AN EXPERTClient Acquisition & Marketing Trends
Key Findings

Many financial professionals feel that focusing on a niche will
negatively impact their business, limiting them to a smaller market
of prospects. While it's true that a niche does limit the size of yourpotential market, advisors who focus on engaging households withspecific characteristics and financial needs grow faster than averageadvisory firms.

THE NUMBER ONE CHALLENGE FOR
ADVISORS IMPLEMENTING FEE-FORSERVICE IS CLIENT ACQUISITIOINWEBSITE, EMAIL, & SOCIAL MEDIA ARE THE

Focusing on one or two niches allows marketing dollars to beconcentrated on campaigns that target specific audiences togenerate a higher impact. Niche marketing also helps differentiate
advisory firms from competitors with a clear and unique value
proposition, making it easier for clients to discover the firm and topotentially refer the firm to like-minded peers.

TOP 3 MARKETING CHANNELS FINANCIAL
ADVISORS ON ADVICEPAY USE

64% OF FINANCIAL ADVISORS SURVEYEDWHO USE ADVICEPAY HAVE A NICHE

With a clearly defined niche, firms can then establish client personas,
which is a detailed description of someone who represents yourtarget audience. Identifying client personas then allows the firm to
map a buyer's journey, which are the steps potential clients go
through to learn about, evaluate, and ultimately engage in advisory
services that meet their needs.

Top Business Goal in 2023 For
Advisors Using AdvicePay
Client Acquisition

Systems and Software

The financial planning profession is elevated for everyone when
the fee and service offering matches a unique and distinct typeof client profile. I don't believe the goal should be to serve
everyone as 'efficiently' as possible, but rather to serve a specificgroup of people as effectively as possible.
ADVICEPAY
FEE-FOR-SERVICE INDUSTRY TREND REPORT 2023

-David Dodd, The Other 90 Financial, LLC

Hiring

Quote here.........
Streamline Operations

Other
0%

25%

50%

75%

Scaling Fee-for-Service Into a Revenue Centerfor Your Enterprise: An AMA with Michael Kitces
and Alan Moore
The fee-for-service business model is evolving rapidly and is one of the fastest-growing segments among financial institutions.
This model allows your financial professionals to profitably engage Gen X and Gen Y households who don’t yet have investableassets, generate revenue for financial planning that’s historically been given away for free, and establish a recurring revenue
stream that is decoupled from stock market volatility.
As co-founders of AdvicePay, Michael Kitces and Alan Moore
are uniquely qualified to answer your questions about this
rapidly-growing business model. Michael’s extensive researchacross thousands of financial professionals, combined with
Alan’s experience supporting dozens of institutions with the
adoption and implementation of fee-for-service financial
planning, promises to offer insights and key takeaways you
likely will not find anywhere else.
This is a session you don’t want to miss! Secure yourregistration for this exclusive event, or register another person
to attend on your behalf, by clicking the link below. If you can’t
attend the live event, register anyways and we will send you
the recording.

REGISTER NOW

February 22nd | 1:00 PM MT

The Future of theIndustry is Now
This year, evaluate how you plan to reach next-generationclients and be ready to meet the changing demands of theindustry by embracing one of the fastest-growing segments
among financial institutions -- fee-for-service financial
planning.
Our team at AdvicePay is ready to help you every step of theway, and we can't wait to see your growth in 2023.

TALK TO AN EXPERTAdvicePay helps firms support
fee-for-service financial planning
revenue models for their advisors
to reach next-generation clients.
Learn how AdvicePay can help you diversify
your financial planning revenue (and client)mix in one comprehensive, unified platform.

REQUEST A DEMO

@AdvicePay

ADVICEPAY | FEE-FOR-SERVICE INDUSTRY TREND REPORT 2023

Sales@AdvicePay.com