The traditional way of charging clients is rapidly falling by the wayside as advisors seek better options. Don t get left behind.
At a recent NAPFA conference, I asked everyone in the audience to raise their hands if they were charging their clients based on assets under management. For instance: If you stop basing your compensation on AUM, how would you do the potentially complicated work of setting appropriate fees for each individual client? How would you get every advisor in your office on the same page and charge appropriately for each client?
I think it’s important to consider some of the reasons why so many advisors are now, for the first time, planning to make this complicated transition.
I’m going to list them from least to most urgent.
1. WHERE’S THE VALUE
2. BLATANT INEQUALITY
3. CONFLICTS OF INTEREST
4. REVENUE MISMATCH