Enjoy the current installment of “Weekend Reading For Financial Planners” – this week’s edition kicks off with the news that a report from Cerulli Associates found that, amidst an industry-wide trend towards comprehensive financial planning and away from pure transaction-based investment management, asset-based fees currently represent 72.4% of advisor compensation, while commission-based revenues have declined to 23% of an average advisor’s revenue. Which reflects similar results from recently released Kitces Research on Advisor Productivity, which found that asset-based fees are used by 92% of surveyed advisory teams (and are the primary revenue source for 86% of respondents), with 42% using hourly or project fees, 37% offering retainer or subscription fees, and 34% receiving commissions (with some firms offering more than one fee model to attract different client segments).
Also in industry news this week:
While inter-channel advisor moves often make headlines, a recent study from Diamond Consultants found that most advisor transitions occur between firms in the same channel
The number of disciplinary cases and restitution orders from FINRA increased in 2024 (the total amount of fines declined) as the self-regulatory organization focused on violations in areas including trade reporting, options trading, and Regulation Best Interest
From there, we have several articles on investment planning:
A review of historical market crashes shows that the ‘pain’ for investors is felt not only in the depth of each drawdown, but also in their duration
While investors might view investment success as the product of active decisions they make, it is often the mistakes they avoid that lead to meeting their long-term goals
Why making political bets with investments can be a risky, and challenging, proposition
We also have a number of articles on client communication:
How applying the “ABC model of stress” can better allow advisors to support clients facing stressful situations and also demonstrate their value to prospects
While the constant barrage of news headlines can give clients plenty of reasons to panic, advisors can add value for their clients not only by serving as a steadying voice, but also by being opportunistic when downturns do occur
The key differences between client stress and anxiety and the communication approaches advisors can use to best respond to each
We wrap up with three final articles, all about leadership:
How a “Constant Gentle Pressure” approach can lead to more consistent levels of client service and better relationships between managers and employees
While operating remotely allows firms to access a broader pool of managers (and staff), doing so effectively can require more proactive methods of employee engagement on the part of leaders
How leaders can get better at delegating, from regularly searching for tasks that they don’t necessarily have to complete themselves to identifying next-generation leaders whose development could be accelerated by taking on new responsibilities
Enjoy the ‘light’ reading!
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