The second choice would be to provide fewer services than promised for these existing clients. (Remember, we are talking about firms that have promised full financial life planning services and updates.) That certainly doesn't sound like a viable long-term strategy. The third option, the one that our firm adopted before changing our compensation structure, was to simply hope that we got enough new business to service all of our clients. The problem with that is twofold: First, it doesn't sound like sound business to plan on losing money from existing clients. Also, the larger your base of existing clients, the more difficult it becomes to attract enough new clients to provide adequate revenue to service them. At some point, this simply stops working.
If one wants to provide robust financial life planning services with frequent updates and meetings to clients, a fairly predictable stream of income is essential. Since commissions are anything but predictable, we don't see how that model can work in the long run for a firm to provide those services. Bob Wells, the American editor for Windows and .NET Magazine writes, "Your true value depends entirely on what you are compared with." As financial life planners, it is our desire to be compared with other professions such as medicine, law, accounting, etc. While it may be appropriate for people who are in sales to earn commissions, in my opinion the profession of financial life planning requires an approach that is more compatible with other professions. And that means charging reasonable fees for financial planning services and not relying on commissions to service our clients.