A trend has emerged in the financial advisory profession for clients to pay for financial advice based on the value of the investment and the growth of the assets – not on the number of transactions. An advisory fee arrangement ties the financial consultant’s compensation to the clients’ financial goals. Many clients prefer this arrangement because it removes the possible perception that advice is in some way influenced by the commission made on the transaction. It aligns the clients’ financial goals with those of the consultant.
For the financial consultant, fee-based service can build equity in your business while providing a predictable stream of income. It allows you to strengthen current relationships, diversify and expand your business, and stay competitive in the changing investment environment.
The decision to move your business from commissions to advisory fees lets you focus on serving your clients and helping them – and you – achieve long-term financial goals. CLS can assist your transition to the win-win partnership of fee-based service, after all, we were founded by an investment advisor and truly understand how the advisor business functions. We suggest you begin with existing clients, and those most open to changing their fee structure. Prior to bringing up fee structure changes with your clients, take time to reevaluate their financial objectives and ensure the clients are eligible for CLS advisory service. With a list of potential advisory fee clients in hand, begin the conversion with education on the benefits of fee-based service.
For additional information on becoming a CLS fee-based advisor, including sample client communications, contact us.