If you’ve decided to make the switch from a commission-based model to a retainer fees model in your financial advisory business, congratulate yourself. You are clearly up-to-date with the latest trends in your industry and have the gumption to explore new frontiers. Your next step is to figure out who the best targets are for your newly adopted monthly fee structure. The quick answer is younger clientele. A commission-based model works better for more established clients with a large asset base. Retainer fees, on the other hand, work better for Gen X and Y’ers who are looking for financial advice as a stand alone service. Marketing financial planning as a standalone service to customers who have previously interacted with the AUM model can be difficult; however, approaching a completely new set of clientele who are not used to a commissioned-based model is far easier. So where do you start?
Writing a financial planning business model that adheres to the trends of a changing market can be a daunting task, primarily because the industry is in the midst of a paradigm shift. In the Assets Under Management (AUM) model that previously dominated the terrain of personal finances, the finance professional’s services were far easier to quantify.