The financial advisory sector experienced a significant uptick in the fees charged for fee-based financial planning services in 2023, as detailed in the 2024 Fee-for-Service Industry Trend Report by AdvicePay. This development underscores the evolving landscape of financial advisory services, where subscription-based models are becoming increasingly prevalent. The report indicates that monthly recurring subscription fees averaged $265 per client, marking a 6% increase from the previous year, while quarterly recurring subscriptions saw a modest rise to $968, up by 1.6%. One-time planning fees also surged by 6.7%, reaching an average of $1,578 per client.
Alan Moore, Co-Founder and CEO of AdvicePay, emphasized the growing disparity between the demand for financial planning services and the availability of advisors to meet this need. Moore highlighted the high retention rates and favorable economics associated with ongoing financial planning relationships, as evidenced by the latest data. This trend is further supported by research from Cerulli Associates and the Securities Industry and Financial Markets Association, which found a marked increase in investors' willingness to pay for advice, from 38% in 2009 to 63% currently. Additionally, the demand for comprehensive, personalized financial advice has grown, with 54% of investors now seeking formal financial plans, up from 38% fourteen years ago.
Beyond fee-based planning, advisors are expanding their service offerings to include investment management (88.4%), tax planning (82.1%), and guidance on held-away accounts like 401(k)s (63.1%). This broadening of services reflects the industry's adaptation to client needs and preferences. For those interested in delving deeper into these trends, the full 2024 AdvicePay Fee-for-Service Industry Trend Report is available here.
