Over the years, financial services professionals have gotten a little too hung up on the issues of fees vs. commissions.
Its not the way you charge that attracts clients. Hopefully, they are attracted by your competence and rapport. What is important is that you are able to help people in the way they would like to be helped and have the ability to be flexible in different environments.
Currently, investors close their managed accounts and if you are dependent on the continuous fee from managed accounts, your income is declining. Similar, if you depend on transaction volume, you have the same problem of declining income.
But if you do retirement planning and charge a fee for that, your income may be rising as people need to redo their retirement plans which have been decimated. Similarly, if you do estate planning, planning for college funding or other type of advice-based planning, in this market, you can maintain a nice stream of income offering what people want.
Similarly, we have a ot of people reaching retirement age. They may be ready to harvest assets like real estate or they may be ready to move to a new location. What are the financial ramifications and can you offer fee-based planning? How about the business owners who have had their business turned upside down? Are there financial projects you can offer (e.g. The $5,000 financial makeover for your business) where you can offer planning and advice services?
You get the point that the more value that you can be to prospects and clients, the more insulated you are from the economy. But if you stick to one way of doing things–a fee for AUM or commission based compensation, you diminish your worth and your income.
Therefore, get a registered investment adviser certificate so you can be the true adviser.
