SEI Advisor Network, the turnkey asset management platform offered by financial services firm SEI, published a follow-up white paper to a popular one from 2015 that details the evolution of compensation in the wealth management industry during recent years.
Among the findings, SEI found that 52 percent of advisors have changed their fee structure in the last 4 years. More advisors are choosing fee-only compensation, as they start or join registered investment advisory firms. In 2017, 58 percent of advisors charged asset-based fees and that is estimated to grow to 66 percent in 2019, according to the study. Meanwhile, the percentage of advisors receiving compensation based on commissions is expected to fall from 33 percent last year to an estimated 23 percent in 2019.
But other forms of compensation are gaining traction. This year’s survey showed that 34 percent of advisors have created pricing models for different client segments, compared to 25 percent 3 years earlier. Some advisors added planning fees (27 percent) and more than a third (37 percent) made other pricing adjustments.