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Preparing Your Business for Subscription-based Financial Planning

Connor Sung February 14, 2024

A financial advisor working on his computer.

Subscription-based services have proven to be successful and popular in a wide range of industries. While the assets under management (AUM) pricing model has been widely adopted in the financial planning industry, a subscription-based model offers advisors the opportunity to reach a large, untapped market of clients who are willing to pay for financial advice.

Three Benefits of Subscription-based Financial Planning

In a subscription-based financial planning model, a client receives a well-defined set of services, meetings, and other touchpoints that they pay for on an ongoing basis. This model offers several key benefits for financial professionals who are looking to expand their financial planning efforts and grow their practice.

1. Diversify Your Revenue Streams

Subscription-based planning will give your firm a predictable, reliable revenue stream that isn’t impacted by market performance. Along with diversifying your revenue streams, it allows you to grow your practice purposefully. You can calculate how many subscription clients you can manage, how many you need to sustain growth, and plan your resources accordingly.

2. Serve a New Demographic of Clients

The AUM pricing model is more profitable when serving the small segment of high-net-worth clients. However, the need for financial advice isn’t limited to one wealth bracket. Offering a subscription-based financial planning service will let you expand beyond high-net-worth clients and serve a different market segment clients who don’t have large investment portfolios but want financial advice.

3. Ease New Clients into Planning

Diving into financial planning can be intimidating for new clients. Starting a relationship with a new financial professional requires a big leap of faith on their part because it can be difficult to trust someone new with their private financial information and worries. Subscription-based financial planning lowers the barrier of entry and offers these clients a way to start planning in a less intensive manner. Once you get their foot in the door, you can cultivate your relationship with them and build trust over time.

How to Adapt Your Practice for Subscription-based Financial Planning

Introducing subscription-based financial planning into your firm requires careful preparation. Here are five ways that you can prepare your firm for a successful shift to a subscription model.

1. Consider Compliance Concerns

Firms that are looking to utilize fee-based or fee-only pricing models must navigate a host of compliance concerns. If you are looking to change your pricing model, one of the first things you will need to do is research the regulations that you will need to comply with and understand the most common types of fee compliance issues.

Regardless of where your business is, there are both federal regulators and individual state regulators that may come into play. Because state regulations apply based on where clients are located and not where your firm is located, you may need to account for a wide variance in state-level regulations.

2. Select a Payment Tool

Subscriptions are typically charged on a monthly basis and renewed annually. Before you start to offer a subscription service, you will need to determine how you will receive your clients’ payments. Managing billing can be a hassle, so consider leveraging a payment and billing technology solution that will streamline the process for you. In addition to payment technology designed especially for financial advisors, you can also consider peer-to-peer transaction systems like PayPal, Apple Pay, or Venmo as an alternative to checks and credit cards.

When you implement your new payment system, be sure to communicate to your clients in advance how, why, and from where they will be charged.

3. Define Your Subscription-based Service Offering

When clients are paying a fee every month, they may expect a tangible planning deliverable every month. However, planning isn’t necessarily that consistent. Financial professionals who offer subscription-based services need to set clear expectations with their clients to help them understand exactly what they are getting for their monthly fee.

Create a client service calendar that details what services you will provide and when you will provide them as part of a subscription. You may wish to utilize a tiered subscription model with an escalating level of services for each tier. In that case, be sure to create a service calendar for each tier to ensure your clients understand what they can get for their money.

As you are deciding what you want your subscription offering to include, keep in mind that a subscription model doesn’t have to be restricted to a comprehensive subscription-based financial planning program. There are people who may be interested in paying a subscription fee for access to technology or access to an advisor as needed.

Once you have determined what your subscription offering will be, you will need to update your marketing assets. All of your marketing communications, from your talk track to your website, should clearly articulate the value you are delivering to your subscription clients.

4. Leverage Workflows and Technology for Efficient, Scalable Planning

Workflows and financial planning technology will be crucial for scaling your subscription-based financial planning efforts. Establishing workflows for the services you provide to your subscription clients will help ensure that you stay organized, manage your time effectively, and provide a consistent service to all. Workflows also make it easier for you to train new employees and delegate tasks.

Investing in a tech stack that can help you digitize and scale your planning process will help you serve subscription clients efficiently and effectively. Look for technology that helps you digitize your onboarding process, aggregate client accounts, and facilitate the seamless transfer of data and documents. Because a subscription-based service will appeal to younger clients who appreciate a digital-first experience, you will also want to look for an intuitive client-facing platform.

 5. Develop a Scalable Email Marketing Program

The knowledge that they are paying a monthly fee can cause clients to reevaluate the relationship every time they pay it. Get ahead of this issue by developing an email marketing program for your subscription clients that shares reminders of upcoming services, educational content, and relevant market news.

Using email as a regular touch point is a scalable way to remind your clients of the value that you are providing to them throughout the year. To ensure that your email marketing program can keep up with a growing subscription client base, consider using a marketing automation tool with email scheduling capabilities.

Make the Shift to Subscription-based Financial Planning

Adding or transitioning to a subscription-based financial planning model can help your firm grow profitably and reach a new audience of clients in need of financial advice. While making a change to a new fee structure isn’t easy, it can be well worth the effort.

Learn more about what to consider when looking at alternate compensation strategies in our ebook “Shifting Your Compensation Model.”

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 Connor Sung
About the Author

As Director of eMoney’s Financial Planning Group, Connor helps clients build more successful practices and deepen client relationships. He leads an exceptional team of financial professionals who help clients transform their technology platform and financial planning processes to increase efficiency, drive growth, and create planning-led user experiences. He oversees eMoney's financial wellness strategy, as well as internal and external financial education programs, aimed at providing financial peace of mind for all. Joining eMoney in 2013, Connor has over 10 years of technology, practice management, and planning experience. He earned a Bachelor's degree from James Madison University, and earned his CFP® designation in 2016. Connor loves spending time with his family and friends in Philadelphia, and enjoys staying active by golfing, snowboarding, playing hockey, and playing with his goldendoodle, Nala.

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