The XY Planning Network this week rolled out two new services at the group’s annual conference in San Diego.

The new offerings are part of the network’s quest to crack the code in serving younger clients.

First up was a new billing package, called AdvicePay, to support the monthly retainer model that the founders of the XY Planning Network (XYPN) encourage their advisor/members to adopt. The new package adds to a list of technology tools members get with their $397-per- year dues.

Also introduced this week was a training program, XYPN Academy, which will begin with a module on how to start an RIA firm, followed by training on how to function as a chief compliance officer.

The monthly retainer model is designed to serve Generation X and Y clients who may be short on assets, but who need help managing debt, dealing with life events and starting an investment program.

“When you’re working with younger clients, they’re paying lots of monthly bills, their cable, mortgages,” etc., said Michael Kitces, co-founder of the network. “So billing monthly is much more natural for them.”

AdvicePay grew out of conversations with state regulators who were concerned about triggering custody rules with monthly pay plans and the refusal of payment processors to work with the financial services industry, Kitces said.

“They think we’re all scamsters,” he says of the processors.

And because payment systems allow merchants (i.e., advisors) to change the payment amounts, that could trigger custody rules that require expensive independent audits.

AdvicePay was built so that  XYPN members need client approval to change and reauthorize payments, so triggering the strict RIA custody rules is avoided, according to the network.

The new tool may help advisors who use the monthly retainer model, but there’s a more fundamental question about how well the model really works: Talk to the youngish crowd at the conference (average age in the network is 37) and you hear doubts about whether a monthly retainer is a viable business model.

“We do hear pushback” on the monthly retainer model, Kitces acknowledged, but part of the issue is what young advisors expect to earn out of the gate.  Retainers, which might run $100 to $200 a month, won’t replicate the average $500,000 earnings of an established AUM practice.

Kitces counts 140 million people in the Generation X and Y cohorts, with millenials (Generation Ys) now “the largest generation in history.” That’s a pretty sizeable market, and it’s underserved.

He also expects the DOL rule to help drive more interest in hard-dollar fees by making more transparent the fees and commissions investors are paying their brokers.

In reality, many XY advisors combine the monthly retainer model with a standard AUM fee, diversifying their income stream and opening up a new channel to handle younger clients, Kitces said.

How many actually use the monthly retainer? Kitces and network co-founder Alan Moore don’t know exactly, but next year they plan to complete a benchmarking analysis to find out.

Developing the tools and overcoming the challenges is all part of any start-up enterprise.

As Kitces says, “we’re birthing a new business model.”

So it’s notable that the XY Planning Network has attracted 309 members since its founding in early 2014. Most have several years of experience and own their own firms.

To encourage start-ups, XYPN started an RIA registration service in early 2015. The registration process was “a huge impediment” to people forming new firms, Kitces said.

The network has registered 150 new RIAs in the last 18 months. The service costs an extra $1,000, with a 12-month commitment to the network.

With about 15 new members coming in every month, Kitces anticipates having 500 members by the end of next year and 1,000 by 2020.

Over that time, he expects to see other networks pop up. Call them a “turnkey financial planning platforms,” or TFPPs, Kitces said. “They’ll be similar to what TAMPs did for money management.”

The idea isn’t unique—the Garrett Planning Network and the Alliance of Cambridge Advisors (since renamed the Alliance of Comprehensive Planners) were early originators, but the XYPN is now bigger than both, Kitces said.

“There’s a tremendous market opportunity” in providing advice to those who don’t yet have huge assets, he said.