Financial advisors who provide life planning services and investment advice make more money and have more successful businesses, according to research released Tuesday by Fidelity Clearing & Custody Solutions.
Advisors providing a full range of planning services have an average AUM of $150 million, compared to $38 million for those who provide only investment advice, and their compensation averages $200,000 a year, compared to $140,000 per year for others, according to the Fidelity study.
“These findings suggest that advisors can grow their practices by offering more of the services that are less likely to be commoditized, such as guiding clients through different market conditions and helping them manage significant life events,” the study's authors said.
Fidelity is collaborating with United Capital Financial Advisers LLC to help promote a new service called FinLife Partners, which includes helping clients plan their financial lives in addition to managing their investment returns.
“We believe that firms need to consider moving to a planning-centric practice in order to demonstrate how their value goes beyond simply managing investments,” says David Canter, executive vice president, practice management and consulting, at Fidelity Clearing & Custody Solutions.