Many of the same compensation methods are available for both financial planning and investment advisory services. This article provides descriptions and examples of common methods. Generally, if members of the firm will not sell financial products for a commission, the decision on how fees will be calculated does not need to be made as early in the practice development process. Compensation Basics You might consider making the fee structure flexible enough to accommodate client preferences.
Many clients are receptive to being given a choice.
Investment advisers are subject to the SEC's and state regulators' rules on allowable types and amounts of compensation. For example, they may take the position that an adviser who charges substantially more than other advisers for comparable work could be subject to the antifraud provisions of the Investment Advisers Act of 1940. CPAs are also subject to state laws on compensation and services that can be provided clients. These laws are administered by state boards of accountancy. If the CPA is a member of the American Institute of Certified Public Accountants, their rules are also relevant.