This week, the wealth management platform that took the concept of fee-for-service financial planning from undesirable to undeniable is celebrating a pair of major milestones that show how much the game has changed.
According to a company statement, the achievement reflects the dramatic shift in alternative, non-AUM advisor fee models and the growing popularity of the platform itself.
But 1 million transactions isn't the isn't the only number worth celebrating this week. In an exclusive interview with Financial Planning, still-new
Sauickie, who most recently served as global head of wealth and retirement services at FIS, joined AdvicePay in July to succeed Moore as CEO after Moore announced that he was transitioning to executive chairman of the board earlier this year.
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For him, both AdvicePay milestones signify that fee-for-service financial planning is much more than a trend. Instead, it represents a significant revenue growth opportunity for advisory firms and enterprises as advisors explore and implement business models that go beyond assets under management.
"To hit both of those [accomplishments] in the time that I've been here is just great. It's something we're celebrating as a team. And I expect we will hit the next big ones at a much faster pace," Sauickie said. "Fee-for-service is no longer the new kid on the block. It came out as this new disruptive kind of thing to AUM-based pricing. And at this point, with the number of firms that we have as clients, including roughly 19 of the top 25 broker dealers … not only do you have a strong number of marquee names and firms. We have multiple clients now that have at least 1,000 or more advisors on the platform.
"So the tires have been kicked. You've got a product that's been tested pretty well at this point."
With that in mind, Sauickie said his team has a number of things they are prioritizing as they head into the new year. The first is to continue to be first to market, and connect with firms looking to do financial planning, or charge for financial planning.
"I've been doing this long enough, and it still surprises me that you have firms that either aren't doing financial planning, which I for the life of me don't understand, have been doing financial planning and haven't been charging for it, or have done it and historically have charged based on AUM models," he said. "AUM is great if everybody's AUM goes up. But if you have a year like 2008 or 2020, fee-for-service protects against a down market. It also plays better to certain clientele, particularly your newer investors, right. So part of what we're doing as we go forward is to ensure that our messaging and our branding is appropriate."
On that final point, Sauickie said it is important that advisors understand that AdvicePay has moved beyond just being a payment platform. With the ability to assist with things like workflow efficiency and compliance, the company is looking to partner with firms more deeply than before.
Driven by the vision of Moore and Kitces, company leaders say AdvicePay was born out of the need to close a gap in billing and compliance systems that weren't equipped for billing recurring planning fees within financial firms and advisor practices.
Kitces said when the company first started, advisors didn't use subscription fee models because it just didn't make sense.
"Collecting a high volume of paper checks simply wasn't scalable and gathering clients' bank account information to bill them directly triggered custody issues," Kitces said in a statement. "So we built AdvicePay to specifically solve for that problem. How to efficiently, compliantly, and scaleably expand their financial planning fees with recurring revenue beyond AUM,"
"In a similar manner to how the technology platform pioneered by Schwab Advisor Services enabled independent RIAs to be able to scalably bill AUM fees for the first time in the 1990s, catalyzing an entire shift in industry business models, AdvicePay is uniquely positioned to drive the next industry-wide business model shift to fee-for-service financial planning."
AdvicePay allows advisory firms to efficiently expand their business models, offering the flexibility to charge minimum advice fees, ongoing subscription fees and standalone planning fees.
Company leaders say this not only enhances profitably with existing clients, but also opens up new markets to clients who don't have assets to manage or a need to purchase a product and simply want to pay for financial planning advice directly.
In the past, charging a flat fee for financial planning instead of collecting commissions or charging a percentage of assets under management was criticized as unprofitable and unsustainable. Moore
But over the past two years alone, AdvicePay has seen a 102% increase in advisors added to the platform and a 193% growth in transaction volume. In 2022 and 2023, AdvicePay was named one of America's fastest-growing private companies on the
One of the advisors who has contributed to AdvicePay's historic transaction tally is Sean Lovison, a CFP and CPA who serves clients as the founder of
"I rose to the level of being a CFO, and I kind of burned out of the whole corporate environment," he said. "I wanted to make this career change … money wasn't my number one driver of doing it. I wanted to move into it to kind of help people through what I felt was my main skill, which was finance. So when I was evaluating models, I really just felt like the flat fee model was the way I wanted to go.
"And that includes all of the services that I offer. So I don't do any kind of tiering behind the scenes where I'm scaling based upon the amount of revenue or AUM that people are bringing over, because to me, it doesn't matter. All my clients are treated equally."
At the core of his decision to go flat rate was fairness and transparency. He said his model allows him to provide unbiased advice to all of his clients, and enhances the level of trust in the advisor-client relationship.
"I start right from the beginning. My website has a fee calculator and I advertise my fees. So people know upfront exactly what they're going to receive," Lovison said. "It also benefits me as well because it kind of screens out people that wouldn't be interested in this service. So you don't get as many tire kickers or whatever else you might have with the other models."
Kelly Berenbaum, a CFP and CEPA who is founder and lead planner of Winter Park, Florida's
After more than 20 years on the corporate side of the business with Raymond James, Berenbaum said she has seen the evolution of the fee-for-service space and believes "the future is bright."
Berenbaum became an advisor in 2021 and was originally going to be part of a Raymond James succession plan before deciding to launch her own firm.
"I tried the AUM model initially, and it just didn't feel right to me. I'm leaving money on the table, but it's just not me. So I moved to the flat fee model because I just think it's better for me. Clients want to understand what they're paying for, and the value that they're getting," she said.
Berenbaum lists access to financial planning, broader and deeper planning topics and a broader approach to investing as some of the benefits to going fee-for-service. Beyond that, the clear understanding of cost and services that clients are able to walk in with allows Berenbaum to get right to the heart of why those clients need a planner in the first place.
"There are a lot of good AUM advisors, I don't want to knock them at all. But having that time and that education and that space … because you're paying for the financial planning, it's much more holistic. It's about your life," she said. "And I think, for me, seeing my clients, and I'm working with a lot of women in their 30s who are either part of couples, or they're making money for the first time on their own, or they're receiving an inheritance. I see that dynamic. They've not been treated well in the past. But to sit down have this holistic conversation … usually I can see relief in her face. And I see the confidence in moving forward. That's what's valuable to me personally."
