Fee-for-service payment processing platform AdvicePay is adding a new feature, representing a major expansion into compliance.
Called Deliverables, the oversight tool will be part of AdvicePay’s core offering, helping enterprises to systematically track, report and manage the financial planning documentation produced by their financial advisors. The feature’s launch comes just days after the firm celebrated $100 million in financial planning fees having passed through the platform.
Deliverables aims to centralize compliance reviews for firms like LPL Financial or Cetera Financial Group by providing a hub for advisors to submit all fee-for-service business, according to the announcement. Advisors upload firm-mandated validators onto AdvicePay—screenshots, PDFs or even client correspondence indicating that financial plans were delivered as promised and paid for.
AdvicePay is hoping Deliverables will solve a major headache for these firms: as they began allowing advisors to charge on a fee-for-service or subscription basis, tracking the actual delivery of the services became increasingly complex. One advisor with 10 financial plan deliverables per year was one thing to track; 1,000 advisors with 10 financial plans was another.
“Our goal with AdvicePay is to become the platform through which enterprise firms are really managing their entire fee-per-service offering,” said Alan Moore, co-founder of the firm. “It's all going to live in one place. You can see all of your agreements, all of your payments, all of your open invoices, all of your deliverables and all the proof-of-delivery of financial planning.”
The firm wants to include any sort of renewals of those services, as well, on its central platform that can be managed and scaled.
The addition of compliance features onto the payment platform isn’t a shift in strategy, it’s an “evolution,” said Moore. AdvicePay began as a tool designed for XY Planning Network’s own member RIAs. After landing its first major enterprise client in Cetera in 2019, AdvicePay has steadily been building out features, such as eSignatures.
The availability of the tool comes as regulators are “scrutinizing that clients are receiving financial planning services for the upfront or ongoing financial planning fees they’re paying,” co-founder Michael Kitces said in a statement. AdvicePay executives “anticipated” this regulatory shift, he added, producing Deliverables.
State regulators, like those in Washington or Utah, are taking a close look at fee-for-service, according to Moore. “Washington has gone as far to say that if you don't literally provide services, you have to refund the client,” he said. Utah has rules about calculating hourly fees.
Even the North American Securities Administrators Association (NASAA) could be laying a framework for fee-for-service scrutiny, according to Moore. “NASAA is starting to pick up where we believe they're going to create a model rule for the states to sort of outline the compliance expectations of service delivery,” he said. “How you track it? What [will] you need to report on? What are the cases from a refund perspective?”
NASAA did not return a request for comment on a model rule like the one described by Moore.
Deliverables will also provide AdvicePay’s consultants with more data to analyze. Moving away from spreadsheets onto a centralized system will give enterprises more insight into the way their advisors provide planning, and the direction in which the financial advice market is going.
“At some point we could roll out a more formal consulting group,” said Moore. “Over time we can start stripping out unnecessary processes that are holding things up. And where we can, then we can automate it.”
In fact, now that Deliverables is live, developers at AdvicePay will turn their attention to deep integrations with financial planning software developers and automation. The validation workflow, for example, is ripe for automation, said Moore. In the future, advisors ideally will be able to review a financial plan with a client, trusting that the firm-mandated validation has automatically been logged and is available for compliance and regulatory review.
For now, AdvicePay is calling Deliverables the “final step” in allowing firms to manage their entire fee-for-service planning program, said Moore. But as with all technology, the job is never truly finished.