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Hilary Fiorella. (Photo: The American College)

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Fee-Based Advisors Feel More Successful: American College

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What You Need to Know

  • The American College Center for Women in Financial Services organized the survey.
  • The participants could decide for themselves, based on their own criteria, whether they were successful.
  • Women with commission-only practices reported feeling especially unsuccessful.

Fee revenue tends to make U.S. financial advisors and life insurance agents feel as if they’re getting somewhere.

Researchers at the Center for Women in Financial Services, an arm of the American College of Financial Services, gathered data on the mood-enhancing properties of fee revenue when they conducted a survey of about 800 U.S. advisors and agents.

The survey team asked the participants whether they felt as if they were successful, according to their own definition of success. The researchers then looked at variables that correlated with feelings of success. One of the variables the researchers analyzed was revenue model. Another was gender.

Here’s how sense-of-success rates looked, by revenue model, for all participants:

  • Mainly fees: 84%
  • Fee-only: 81%
  • Mainly commissions: 66%
  • Salary plus incentive: 77%
  • Commission-only: 58%

Here’s what the sense-of-success rates looked for women who participated in the survey:

  • Mainly fees: 96%
  • Fee-only: 87%
  • Mainly commissions: 83%
  • Salary plus incentive: 77%
  • Commission-only: 55%

What It Means

Money talks. For many financial advisors and life insurance agents, fees sing.

The Survey

The Center for Women in Financial Services fielded the survey in late 2021.

The center has published a summary that talks about how many different factors, including firm size, firm business model and professional designations, correlate with participants’ sense of success.

The analysis here is provided on a separate slice of survey results that the center shared with ThinkAdvisor on Thursday.

Hilary Fiorella, the center’s director, said the survey results may help financial firms attract and support advisors.

“Through this research, we sought to understand what drives advisors’ success, as it can provide valuable guidance to women (and men) considering this profession,” Fiorella said.

Commissions

One takeaway is that the survey participants who relied solely on commissions were more likely to feel unsuccessful.

But about 83% of the women who said they rely mainly on commissions reported feeling successful.

It’s possible that the commission-only participants had a lower sense of success because they are offering different types of products and services or working with different types of financial services companies than the participants who said they were earning a salary, or getting at least some fee revenue.

Hilary Fiorella. (Photo: The American College)