The most aggressive movers into fee-based grew revenues by 47% over the last three years. Average revenues per fee-based account average $2900 versus $870 for commission-based accounts.
Boosting fee-based business by a minimum of 25% over the last three years yielded increased numbers of clients and those clients brought in larger assets. Recurring revenue from those clients jumped 41%.
The advisors going more rapidly into fee-based tend to be between the ages of 40 and 64. This means that those still doing commission-based business will likely diminish naturally as older advisors retire.
But the trend is not simply the result of attrition. And most advisors have yet to become completely fee-based. It’s still a challenge to make the transition. The best way to start is by handing off your lower revenue clients.
Explaining the difference in the two types of accounts as well as identifying opportunities within each is the best approach. You may also want to keep in mind the fiduciary aspect of doing what’s best for the client. A client who does not trade much may actually be better served paying commissions.
Being crystal clear on the type of business you want to do and how you can best serve your clients’ needs through your particular expertise should always be the primary decision factor. Including clients in these types of decisions is also a great way to cement relationships and take them to the next level.

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