Fee-Based Models Dominate as Advisers Respond to Shifting Client Expectations

By 2026, nearly 78% of adviser compensation is projected to come from fees.

Asset-based fees remain the dominant compensation model for financial advisers, currently accounting for 72.4% of income, according to the “Cerulli Edge—Americas Asset and Wealth Management Edition.” That figure is projected to rise to 77.6% by 2026, as firms continue shifting away from commissions.

Pricing Strategies Shift to Meet Diverse Client Needs

Commission-based revenue has already fallen to 23% of average adviser earnings and is expected to drop further to 17% by 2026. In response, advisers are diversifying pricing models to meet a range of client needs. For instance, 16% of advisers serving clients with less than $100,000 in investable assets offer monthly subscription fees, while those working with higher-net-worth clients often charge annual or financial planning fees.

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Despite this evolution, about one-quarter of investors said they are unsure how they are being charged, according to Cerulli Associates. The report suggested that transparent, upfront conversations about fees not only build trust, but also help attract clients willing to pay for advice. Strategic partners can support advisers in identifying the right pricing models for their target markets and guide effective client communication.

The shift toward fee-based models is particularly strong within wirehouse and broker/dealer channels. Independent registered investment advisers, however, are expected to reduce their reliance on asset-based fees and lean more on financial planning and retainer-based models. Currently, 87% of advisers said that at least half of their revenue comes from fee-based accounts—a number expected to reach 97% by 2026.

“While asset-based fees are on the rise, they are not suitable in every situation,” says Andrew Blake, a Cerulli associate director of wealth management. “Alternative fee structures, such as annual or hourly fees, can provide greater flexibility in client service and a competitive advantage for firms in the fee-based business model.”

Alternative Fee Models Gain Traction

As more investors access financial education online and take greater control of their portfolios, they are also seeking lower advisory costs. To stay competitive, advisers are expanding alternative fee structures and bundling planning services into broader offerings.

Charging for financial plans is the most common nontraditional fee model—21% of advisers reported earning revenue this way. Fees for comprehensive plans vary widely, from $125 to $20,000. Adoption of this model also varies by channel: Just 3% of wirehouse advisers reported generating revenue from planning fees, compared with 38% in the insurance broker/dealer channel and 35% among independent broker/dealers.

Planning Services Justify Separate Fees

With growing demand for comprehensive advice, Cerulli Associates recommended that advisers carefully evaluate how they charge for services beyond investment management. According to the report data, practices are divided: Some bundle financial planning into their standard advisory fees, while others charge separately.

Given the time and complexity involved, many firms set high thresholds for planning clients. The average minimum asset requirement for financial planning now exceeds $662,000. In October 2024, Edward Jones rolled out a stand-alone planning service for clients with at least $250,000 in advisory program assets. This offering includes a separate agreement and fee, reinforcing the distinct value of personalized financial planning.

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