Fee broker-dealers. There are now B-Ds that charge a fee for their support rather than a percentage override of your production and receive no compensation from the product providers on your sales.

The proliferation of services like "RIA in a Box" to help advisors make this transition.

The proliferation of no-fee/no-commission annuities and insurance products with all the features of fully loaded products. While these have long been available on a smaller scale and with fewer features, they are going mainstream. It seems the insurance and annuity companies are recognizing the market potential of the RIA and flat-fee-for-advice model. (See Gail Liberman's article in the July 2011 issue of this magazine.)

The continuing advisor mindset shift from gathering assets and being investment focused to giving advice about achieving goals and getting your entire financial house in order.

An insurance-company-owned B-D recently hired me to help them convince their most successful advisors/agents that they should convert their business to flat-fee-for-advice and to teach them how to do it. Read that again: an INSURANCE-company-owned B-D.

Australia and other countries whose governments are mandating a fee-for-advice model. Instead of having government agencies police the potential conflicts of interest and inspect for full disclosure, they are "solving the problem" by simply eliminating conflicts. The solution? Progressively eliminating commission and fee compensation based on products and requiring that advisors be paid directly by their clients for advice. Their rationale is that the client and the advisor should work out how valuable their advice is and set the price rather than that being determined by the product/service providers, thereby forcing the client to figure how much their advisor is being paid through some combination of advisor disclosures and reading complicated legal documents like prospectuses. In other words, "Tell me what you'll do for me and how much you charge, and if I agree I'll pay you for it." One of their goals is to eliminate any financial person ever again saying something like, "You really don't pay me anything; the product provider we choose pays me." 

You can read more about this at http://futureofadvice.treasury.gov.au. Similar things are happening, or have happened, in the U.K. and other countries. I am not predicting that our government will intervene in the same way. I believe that market forces will drive this change here. Just as 1% of assets have become the new normal for compensation, I believe it will be replaced by the next new normal of a flat fee for advice.

The word is beginning to spread that financial services could be a fixed-cost business, not basis points. Similar to Schwab figuring out that people with bigger stock trades don't have to pay more to sell or buy, money managers are acknowledging that there is little, if any, difference in the work involved to move $10 million or $5 million or $1 million into the markets. Therefore, they are setting themselves up to be paid a fixed, flat fee to manage the money instead of basis points on the assets. Some insurance experts are doing the same thing.

The recent economic downturn and market decline caused many advisors to realize that it doesn't make sense for the fee and their income to fluctuate based on market or economic events. Clients need, and are willing to pay for, their advice in all economic cycles.

Wealthier clients are beginning to grumble about feeling gouged by an asset fee that requires them to pay more for the same service just because they have more money. "If it doesn't cost any more to manage my $5 million portfolio than it does to manage a $1 million portfolio, why am I paying so much more?"