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April 12, 2018 at 02:56 PM
Eighty-four percent of some of the biggest U.S. financial advisory firms did not change their pricing last year, according to a survey conducted at Pershing Advisor Solutions’ late winter Elite Advisor Summit.
Moreover, 58% of attendees in the poll reported that their clients were not increasing pressure to reduce fees.
Among the few who reported that they had changed fees last year, 10% increased them.
Three in five survey respondents said offering holistic wealth management services — including estate and tax planning and private banking — was the most important factor in giving them better pricing power in the market. One in three said strong brand recognition was the most important factor.
“Our experience is that those advisors who demonstrate value beyond asset management and basic investment counseling not only maintain prices but are also better positioned to drive growth in the long term,” Gabriel Garcia, managing director at BNY Mellon’s Pershing Advisor Solutions, said in a statement.
The CFA Institute recently found that fee disclosure was key to client trust, but less than half of clients were satisfied with that aspect of the advisor relationship.
In addition, a new report said the traditional asset-based fee model for wealth managers was showing its age.
The average assets under management of the 71 advisors at Pershing’s invitation-only summit had an average of $4.2 billion in assets under management. Thirty-one attendees responded to the online survey.
Seventy-four percent of elite advisors said tax planning was currently driving their business, while 61% said it was alternative investments and the same percentage said philanthropic investments. Private banking solutions was the key driver for 52% of respondents’ business.
