The Future of Financial Planning Advice, Part 1

Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.

Advisor Perspectives is fortunate to count outspoken thought leaders such as Dan Solin, Bob Veres, and Sara Grillo among its frequent contributors. As a regular reader, I do not always agree with their positions, but I value their raising awareness of various financial planning industry trends and creating a forum for civil debate. Although AP has many outstanding contributors, those three have presented their views on financial advisor compensation models and the outlook for the future of financial advisor compensation.

Examples of their previous AP contributions on this topic are as follows:

Dan Solin, Five Reasons Your Asset-Based Fee Model Won’t Survive (11/14/2016)
Dan Solin, Five More Reasons Your Asset-Based Fee Model Won’t Survive (11/21/16)
Bob Veres, Don’t Fear the Meter: The Inescapable Future for the Hourly Revenue Model (12/6/2021)
Sara Grillo, The Price Advisors Will Pay for Ignoring Flat Fees (3/25/2022)

I find three common themes. All three suggest that commissions and asset-based compensation models are more conflicted than hourly, flat-fee, and subscription billing. They believe the dominance of these conflicted models is preventing financial planning from evolving into a true profession. Third, they write that conflicted models are heading to extinction and that advisors who fail to adapt to the new paradigm will soon go the way of the dinosaurs.