It's a good point. Your challenge, if you are a percentage-of-assets fee-based advisor, is that if another advisor comes along and tells your client about a flat-fee-for-advice model that provides the same or better value at the "new normal" price before you do, it could create a trust breach between you and your client. Wealthy people don't mind paying their fair share, but it irritates them when they discover that they are paying more to subsidize the people who pay less. Are your clients with more money subsidizing your business so you can afford to serve clients who pay you less?
Here's a script for talking to your clients if you choose to transition to a flat fee for advice: "Based on how the financial services business is evolving, we believe that you are better served by paying a flat fee for our advice and service rather than a percentage of your assets. We do so much more for you than just investment management and we believe the way you are paying us no longer reflects the value we provide. So today we are going to review every element of the service we provide for you and propose a flat fee for our service instead of variable percentage of assets."
Explain what you do, the value to them, how much you will charge for this value going forward, and answer their questions. For some clients, the fee may go down and for others the fee may go up. What's important is the fee for everyone is right-sized and the value the client receives exceeds the fee.
How do you set your fee?
Do the money math and decide how much total business revenue you need in order to cover your business expenses, pay your taxes and have plenty of personal income to pay for your present lifestyle and fund your future goals.
Do the time math: How many clients do you want to have and how many do you actually have time to serve given your desired number of work days/year and work hours per day. Hint: You can only deliver truly comprehensive financial services for 100 or fewer clients.
Divide your required business revenue by the number of clients and that equals your minimum fee. Then consider the value-based method for setting your fee. In other words, what is the value of this service for the people to whom it's being provided?
You may only need a $10,000/client, but the value may actually be $20,000 for your ideal or target client. In that case, I recommend that you set your fee at $20,000 and reduce your target number of clients. You make all the money you need to run your business and make your life work and have more time (which is much more valuable than money) to live an even better life.
Why does this matter to you? Because when you proactively transition to a fee for advice, you will create greater client loyalty with your existing clients and easily "steal" clients from other advisors and institutions who are slow to adapt.
The HUGE opportunity for the flat-fee-for-advice advisor is to present a better value proposition at a lower fee. The result will be some clients transitioning all of their financial services business from their current relationship(s) to you. Simply put, you can deliver a better value proposition (truly comprehensive financial services) very effectively for, let's say, $20,000/year.