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Advice-only Financial Planning: Wave of the Future?

Joe Buhrmann August 29, 2023

advice only financial planner

Depending on who you talk to, the advice-only financial planner model is either the future of financial planning or a “noble idea that has little chance of making inroads.”

The latter is the position of Michael Finke, professor of wealth management at The American College of Financial Services.1 The former idea has supporters that include Michael Kitces, a leading expert on financial planning, and Jeff Benjamin, a senior columnist at InvestmentNews and former analyst at Cerulli Associates. These two see advice-only as a natural fit for advisors who seek to hold themselves to a high fiduciary standard.

Prominent advice-only financial planners like Cody Garrett, founder of Measure Twice Financial, and Jon Luskin, founder of Luskin Financial Planning, have made a solid case for this type of planning. “It feels better to work with someone who’s excited and interested in financial planning,” Luskin wrote in an editorial for NAPFA Advisor.2

To explore both sides of the debate, let’s break down the opportunities and challenges that this little-known segment of our field presents.

What Makes a Financial Planner “Advice-only”

There are some basic requirements for advice-only financial planners. Under this model (also known as fee-for-service financial planning):

  • You don’t manage investments, though you provide advice related to asset management and refer to vetted investment and insurance professionals.
  • You typically are operating as an RIA because you’re providing investment advice. Those compensated for advising others about investments must register with the Securities & Exchange Commission and adhere to regulations designed to protect investors, according to the Investment Advisors Act of 1940. However, only advisors with $100 million AUM or more must register with the SEC; if you don’t meet the threshold, you usually register with the state where your main office is.
  • You don’t charge based on a client’s assets under management. Instead, your compensation model consists of an hourly fee, an ongoing retainer, a project-based flat fee, or some combination of the three.
  • You have Certified Financial Planner™ certification or an equivalent level of professional credentials and experience.

An estimated one percent of advisors use this practice model currently.1 However, experts expect that to grow as DIY investors proliferate and seek advice without giving up control.

Benefits of the Advice-only Model

Let’s start with the good news. There are many positive things in this model for both clients and advisors.

  • It broadens access to financial planning. For clients without million-dollar accounts, or for younger clients whose assets are primarily tied up in employer-sponsored retirement plans, there just aren’t enough assets for a traditional fee-based advisor to manage (the average asset minimum is $500,000). The advice-only model gives these consumers access.
  • It eliminates conflicts of interest. Advice-only planners have nothing to sell except their expertise. In contrast, being paid on commissions incentivizes selling, and being paid based on an account valuation prioritizes asset gathering, which is not always in a client’s best interest.
  • It increases fee transparency. You don’t tie the way you bill clients to the account size. That makes it much clearer what clients are paying for—advice. Advice-only advisors are more likely to precisely define the services they’re offering for the fees they’re charging, with a clear service calendar and client segmentation.
  • It can reduce the overall amount of fees for clients. This is great for clients but presents a challenge for advisors who then must seek a higher quantity of clients to maintain profitability.
  • It can deliver eager, motivated financial planning clients. One of the challenges financial planners face is a lack of client motivation, eMoney research shows.3 But when a DIY investor seeks an advice-only advisor, they’re typically already sold on the value of financial planning and they’re willing to tackle portfolio implementation and maintenance.
  • It frees the advisor to offer holistic planning that covers a wider range of topics. This is especially useful for nontraditional wealth management clients, who may have questions about maximizing the household’s employee benefits, whether to save in a traditional or Roth 401(k), or whether to buy or lease.
  • It simplifies compliance. When you are not in the AUM fee model, you don’t have to worry about billing based on an incorrect account valuation, to offer one example.

Challenges of the Advice-only Model

As we’ve alluded to, there are a few stumbling blocks to overcome in adopting the advice-only model in your financial planning practice.

  • It can reduce the overall amount of fees paid. That means advisors will have to find ways to attract and serve a higher volume of clients to make the same amount as they might under a different practice model. research shows the median hourly rate for advisors is $250 an hour, the median standalone financial plan fee is $2,500, and the average retainer fee is $4,000 a year.4 Compare that with the median AUM fee of $10,000 annually, and you’ll see why this model isn’t already more widespread. However, advisors who enjoy putting together holistic plans have an advantage. Our research revealed that the more complex a financial plan gets, the more revenue you can generate:3
  • It can create sticker shock. Paying several thousand dollars for a financial plan can be difficult for some households to wrap their heads around, especially cost-conscious DIY investors. There’s also no account to draft your fee from—the client has to physically write a check or provide a credit card. All of that can make managing expectations difficult.
  • It mainly works best for DIY investors without substantial accumulated assets or complexity. To be a DIY investor for the long haul, you must have an above-average level of financial education and dedication. At a certain point of complexity or stage of life, an investor may desire a switch to a less time-intensive model.

The Future of Financial Advice

Alternative fee structures continue to grow in popularity, especially as advisors expand into the mass market. With financial planners predicting that AUM fees will peter out over time as the actual asset management becomes more commoditized, and as practices across the country add financial planning fees and reduce their AUM fee, the advice-only model is worth a second look.

To explore the ranks of these advisors, visit or search for “advice only” at XY Planning NetworkGarrett Planning NetworkNAPFA, or Fee-Only Network.

If you’re thinking of making tweaks to how you bill clients, check The Pros and Cons of Popular Financial Planning Fee Structures or read our eBook, Shifting Your Compensation Model.


1. Kiplinger. “Advice-Only Financial Advisers Don’t Touch Your Money,” November 2022.

2. NAPFA Advisor. “The Case for Advice-Only Financial Planning,” July 2022.

3. eMoney Leading with Planning Research, May 2022, Advisors n=360.

4. “Financial Advisor Fee Trends And The Fee Compression Mirage,” February 2021.


DISCLAIMER: The eMoney Advisor Blog is meant as an educational and informative resource for financial professionals and individuals alike. It is not meant to be, and should not be taken as financial, legal, tax or other professional advice. Those seeking professional advice may do so by consulting with a professional advisor. eMoney Advisor will not be liable for any actions you may take based on the content of this blog.

Image of Joe Buhrmann
About the Author

Joe serves as a Senior Financial Planning Practice Management Consultant at eMoney Advisor. With more than three decades in the financial services industry, Joe aligns his know-how and passion to help firms of all sizes increase usage, adoption, and engagement through a modern financial planning experience. He leverages his expertise and supports internal departments across the enterprise, helping Communications, Marketing, Relationship Management, and Sales. Joe attended Illinois State University, where he received his bachelor’s degree in Applied Computer Science and his MBA.

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