Financial Planning

Only 1% of financial advisers completely embrace fee-only service

PriceMetrix research consultants report that only 1% of financial advisers have completely converted to fee-based services. 99% cling to the older commission-based approach despite overwhelming evidence that clients are surging to fee-based approach. I am quite surprised by this study; other indicators led me to believe that as much as 5% of financial advisers, especially CPA financial advisers, were fee-only with no association with a broker/dealer firm. The study is focused on advisers in the U.S. and Canada but the published report does not indicate the makeup or selection process of the advisers surveyed. Unless the underlying population polled in this survey is somehow skewed then apparently I’m the odd man out.

There is no doubt in my mind – and apparently the public agrees based on these industry trends – that fee-based financial planning is superior approach to commission based planning. See my editorial reprint “Who to trust for financial advice” for more discussion on this important topic. What is not clear is why advisers are not responding more assertively to the message.

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