I hope you're all doing well and staying financially savvy. I've come across an article that I believe is a must-read for anyone interested in the future of financial planning.
The article discusses a recent study that shows a downward trend in fees charged by intermediating financial planners. The average fee has dropped from 2% to 1.75%, marking the first decrease in five years. This change is largely attributed to new consumer duties that emphasise fair value.
However, the cost of doing business hasn't decreased, putting a squeeze on profit margins and exit valuations for these planners. The study also reveals that 17% more advisers plan to change their fee structures in the next year.
So, what does this mean for the future? The article suggests that this could be fertile ground for alternative fee models, such as subscription-based services. It also indicates that more advisers are considering exiting the business, with 16% planning to sell their firms in the next 18 months.
This could be a pivotal moment for non-intermediating financial planners like us. As the traditional model faces challenges, there's an opportunity for more transparent, client-focused approaches to take the lead.
You can read the full article here: https://academyoflifeplanning.blog/.../the-future-of.../
I'd love to hear your thoughts on this. Do you think the non-intermediating model could eventually overtake the traditional one? Let's discuss!
Best wishes, Steve