Remember learning about the Industrial Revolution? How technological advances, like the steam engine, railways, and the telegraph, increased productivity and reduced the cost of key items? Looking back, we consider that to be a pivotal time in history. And while there were many benefits, there were also many workers concerned with the changes taking place and the impact on their jobs.

Of course, technology continues to disrupt every industry, including financial services. A recent webinar, “The Future Of Charging For Financial Plans,” hosted by Envestnet | MoneyGuide and featuring guest speaker and well-known industry thought leader, Michael Kitces, reviewed five key trends shaping the industry and moving it forward:

  1. Technology-Driven Changes
  2. The Great Convergence
  3. Crisis of Differentiation
  4. The Search For New Models
  5. The Client Experience

But, while disruptions can lead to unprecedented change (and have many times before), they never overwhelm the advisor. Why? Because you adapt. You evolve. You find new ways of doing things that improve both your business and the value you provide your clients.

For example, robo-advisors and self-directed financial planning software can never replace a financial advisor because your real value is talking with clients and directly addressing their concerns and questions.

But the fact is, under the AUM model, advisors are competing for the same few Baby-Boomer clients, who own $26.2 trillion in investable assets, more than sixteen times that of the combined $1.6 trillion owned by Generation Y and millennials.1 And there aren’t enough Baby Boomers to go around. In fact, under the AUM model, there are only 21 clients per advisor. As a result, you need to evolve your practice to:

  1. Reach a wider audience.
  2. Build a steady, recurring client base.
  3. Scale and grow your business.

While the AUM model is conducive for working with Baby Boomers (who have the assets but lack the income), a recurring planning fee or retainer fee that ranges from one to two-and-a-half percent of household income may be better suited for casting a wider net and working with employed clients. Further, this type of fee structure helps reach a group of prospects that Kitces refers to as validators, those who are looking for advice or confirmation but aren’t willing to fully relinquish control of their assets to an advisor.

By leading your client relationships with financial planning and Envestnet | MoneyGuide, you can better demonstrate your value and justify ongoing fees by personalizing your service for each client, helping them understand their behaviors as they work towards their goals, and providing clarity around complex topics like taxes and Social Security.

As investors become more cautious and want to better prepare for what’s ahead, you are positioned to provide the customized guidance they need.

Download the webinar recording of “The Future Of Charging For Financial Plans,” for insights from Michael Kitces on the evolution of the role of the advisor and payment models, and why financial planning will likely play a key role in what comes next.

And, don’t miss the opportunity to take part in the third edition of the MoneyGuide fee survey. Add your input on fee-for-service business models to help us uncover what the fee landscape may look like in the future and how it has evolved since our last survey in 2017. Please take a few minutes to complete this brief survey.


  1. Ann Marsh, “Advisors can ill afford to neglect this client segment (Hint: Not millennials),”, last modified on September 27, 2018,,%241.6%20trillion%2C%20the%20study%20found.

The information, analysis and opinions expressed herein are for informational purposes only and do not necessarily reflect the views of Envestnet. These views reflect the judgment of the author as of the date of writing and are subject to change at any time without notice. Nothing contained in this piece is intended to constitute legal, tax, accounting, securities, or investment advice, nor an opinion regarding the appropriateness of any investment, nor a solicitation of any type.

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