Every one of us has had this problem. We were contacted by someone looking for a financial advisor. They were referred to us by their accountant, their aunt, or their attorney. People who know and respect us. We do everything right. We set up a meeting. We dress professionally and observe business etiquette. We pay attention to them and gather all of the right data. We do a great presentation of our services. They politely listen and say they will get back to us. Then, crickets. Or worse, but more professional, the call or e-mail and tell us they went another direction. What happened?
Here are a couple of obvious reasons why, there are plenty more. They were overwhelmed by all of the presentations and decided that it was information overload, and then there were all of those great advertisements for the big mutual funds and inexpensive investment firms. They decided they would go it alone. They had an equity compensation plan with one of the big banks and saw no harm in keeping the money there and using the financial advisor that was assigned to their account. They have little or no IRA or 401k money, had a taste for real estate, and decided to just buy a couple of rentals. And the best one: they were so overwhelmed with how much you were going to charge them with that normal one percent fee that they decided to go somewhere else where it was cheaper.
How do you solve the problem?
Consider using an all-encompassing flat fee to win that business.
A few reasons why.
First, it is the most objective way to manage a client’s assets. Sure, there are plenty of appealing ways that asset-fee based financial advisors are objective. But what if the client needs an insurance policy? These are sold with a commission. Sure, you can refer that business out to your friend at an insurance company, but then what are the chances the life insurance agent is going to put the client into a policy that is more than they really need? Certainly not 0%. Also, that insurance agent who does not have the same relationship with the client that you have might take way too long going through the process of getting the policy, whereas you can do very quickly.
Second, you have the ability to price shop for the client. We all know that pricing both for financial and non-financial products is very confusing. There are in-depth studies showing that confusion leads to higher costs, because the ability to do apples-to-apples comparisons is incredibly difficult and investment companies use this in their favor. If you, as a fixed-fee advisor, are doing the shopping instead of the busy and naïve client, the client usually gets a better deal.
Third, when they need other professional services such as tax professionals, legal professionals, and even real estate or business brokers, you are able to bring a couple or three of these colleagues in and conduct with the client a series of interviews. This is such a value add for the client that it alone justifies the fixed fee.
How do you set the fees?
There are several ways to set your fees.
One way is very simple. Look at the client’s net worth and simply multiply by a competitive asset-based fee rate. If the client is worth $1 million and your fee is generally one percent, charge them $10,000. Maybe break it into four $2,500 quarterly payments. Notice I said their net worth is $1 million, I did not specify what the constitutes their asset base. This could be $250,000 in an IRA and a rental that is appraised at $750,000. Why on earth would they pay you to help with the rental, you ask. Perhaps you connected them with, and have a relationship with a property manager. Maybe you showed them how Cost Segregation could save them some taxes. Maybe you helped them buy another rental with that inheritance they got from Aunt Millie , because they like real estate more than stocks and bonds. There are almost countless things you do for them that extends beyond just managing that IRA.
Another way to do it is to figure out what your time is worth and estimate the time you expect to spend on the client’s projects. Simple analogy, you’re making $100,000 a year, and you believe it will take 20 hours a year to work with the client. You charge the client $5,000 per year, again maybe breaking it up into four $1,250 payments. The trick here is considering project creep. This leads to my next subject.
How do you grow the fees?
My experience with growing fees relies upon understanding how fast the client’s net worth should increase based on their investment mix and consumption. If they are investing aggressively and adding $100,000 to their investments each year, you can do the math to see when they reach a milestone ahead. Right at the beginning, you say: “You are worth $500,000 now, and I’m going to charge you $250 a quarter, but when you get to $2 million I want to revisit this.” Once they get to $2 million, you recalculate and perhaps raise the fee to $1,500. Everyone is happy. Remember to set a higher hurdle rate when you get there.
How many financial advisors are doing this now?
The Investment Adviser Association (IAA) 2025 Industry Snapshot suggests that only around five percent of advisors use flat fees, most use exclusively asset-based fees, and many also add an additional fee for creating a financial plan. The Envestnet / Datos Insights (2026 State of Fees) also lends credence to my belief that the number of exclusively fee-based relationships are minimal. Using this approach is a fine way to set yourself apart from other advisors competing for business.
