A recent article published in Financial Planning magazine penned by noted industry author Bob Veres discusses how he has been a proponent of the financial planning profession move from AUM-based fees to retainer fees.
Mr. Veres goes on to say in the article that he may be backing away from suggesting retainer-based models due to the experience some state registered firms have encountered with regulators. It appears that from state to state there is a difference in how those retainer fees are viewed. As Mr. Veres researched further, he found that state regulators have one central view in common, they typically push back on a retainer-based model.
I won’t go into too much more detail with respect to the article, other than to mention that advisors have begun to implement what are currently known as retainer fees in their practices for a variety of reasons. Among those reasons, the ability to serve younger clients early in their wealth accumulation.
At Dynamic Wealth Advisors, our advisors have the flexibility to choose the revenue model(s) that fits best for their clients, and their business.
Mr. Veres later explains that part of the challenge may be the interpretation of the word retainer, and cites XY Planning Network’s description for their retainer as, “fixed annual fee, payable monthly, for financial planning services.” Of course depending on your firm, that might be billed quarterly instead of monthly.
Have you considered changing the way your charge clients for your services? Or are you one of those state-regulated advisors who has been through an examination and faced challenges for your “retainer” fee model?
Click the link to read the original article: http://www.financial-planning.com/news/why-this-common-planning-word-keeps-setting-off-regulators