The financial planning business model is swiftly evolving. Gone are the days of when it was a time-consuming and complex loss-leader! In 2021 it is now being powered by advanced technology to become a highly lucrative fee-based revenue stream.
Last month, AdvicePay hosted a webinar with top industry executives to discuss their journey in repositioning and re-introducing financial planning to their firm’s thousands of advisors through subscription models, retainers, and other fee-for-service arrangements. These industry leaders shared valuable insights into scaling financial planning, how they’re using AdvicePay to drive revenue, and much more.
We’ve compiled 15 standout quotes from the webinar. Let’s dive in!
Profitability and Scalability Of Fee-For-Service Financial Planning
1.“Over the course of the last year and a half since working with AdvicePay, we have really seen a significant change in our financial planning revenues at the firm. We are projecting about a 40% increase in direct financial planning revenue largely due to the streamlined billing process and flexible payment options that AdvicePay provides.” -Jamie Kulik, CFP®, Vice President, Financial Planning, LPL Financial
2. “We see things that were maybe on a 3-5 year plan of how we could leverage and embrace technology, now how do we accelerate that to 1-3 years? Because we know not only us in the home office, but our financial professionals and their clients are ready to embrace the technology. And that just gives us all the opportunity to scale and create it as a revenue source.”-Valarie Vest, Vice President, Fiduciary Services, Cambridge Investment Research, Inc.
3. “The lifetime value of a single client is 10-30X as large when you convert from a transactional business into a subscription-based business.” -Michael Kitces, CFP®, Chief Financial Planning Nerd at Kitces.com, Co-Founder of AdvicePay
4. “This is one of the most exciting areas for advisors, particularly younger advisors in the hyper-growth phase of their practice development.” -Shannon Spotswood, President, RFG Advisory
5. “This subscription thing that we are talking about is more on the cutting-edge in our industry, but it’s everywhere else outside of our industry...So in a lot of ways the clients are pushing for it as well because that’s where their expectations are.” -Valarie Vest, Vice President, Fiduciary Services, Cambridge Investment Research, Inc.
6. “Today, advisor’s revenues go up and down as markets go up and down. This can provide a layer of clear, steady income.” -George Karris, SVP Head of Strategy, Cetera Financial Group
How Financial Advisors are Charging for Financial Planning
7. "One of our recent internal studies showed that our advisors who are charging separately for planning compared to their LPL peers, and they’re using AdvicePay, they are growing 3.8X their net new assets compared to their peers that weren’t using AdvicePay.” -Jamie Kulik, CFP®, Vice President, Financial Planning, LPL Financial
8. “If ever there was an opportunity for advisors to embrace a new revenue channel, a new business model, and deliver consistent value from planning -- it’s right now.” -Shannon Spotswood, President, RFG Advisory
9. “Planning fees, in general, we are seeing going up.” -Michael Kitces, CFP®, Chief Financial Planning Nerd at Kitces.com, Co-Founder of AdvicePay
10. “The going rate on fees is relative to the client's income.” -Michael Kitces, CFP®, Chief Financial Planning Nerd at Kitces.com, Co-Founder of AdvicePay
11. “About half of our financial professionals who are charging for their planning, are doing it on some sort of subscription basis. And they’re charging higher fees than those who are doing just the one-time planning fees.” -Valarie Vest, Vice President, Fiduciary Services, Cambridge Investment Research, Inc.
Systems and Processes
12. “This is the best operating protocol as it relates to how you’re going to collect fees -- and there are no checks involved. So if you want to play in this business model and you want to be a part of this new way of delivering value to your clients and adding this revenue stream to your practice, get on board with the technology that is going to optimize around it.” -Shannon Spotswood, President, RFG Advisory13. “There’s less chasing down checks now, and that’s thanks to AdvicePay.” -George Karris, SVP Head of Strategy, Cetera Financial Group
14. “We found out with our physical checks, that we have four different and distinct departments that are managing that process. With four different departments involved, there is the opportunity for checks to become misplaced and it takes longer for advisors to be compensated. So now that we utilize AdvicePay, it’s one department that processes the transaction.” -Jamie Kulik, CFP®, Vice President, Financial Planning, LPL Financial
15. “I have one advisor who told me that through this new process that he has one month of his assistant’s time freed up.” -George Karris, SVP Head of Strategy, Cetera Financial Group
Want to watch the webinar?
Click here to watch the entire recorded session!
Posted by Shannon Beck
In her role, Shannon oversees all aspects of AdvicePay’s marketing and brand communications. Her experience in marketing for continuing education and tech companies means that she’s both a learner and a teacher through her work. When she’s not using her creative skills to help folks learn about AdvicePay and how to get the most out of it, you can find her kayaking, camping, and trying out new recipes with her husband. Born in Baltimore, she’s still an avid Raven’s fan, cheering from Montana.