More advisors are choosing to be paid by fee and commission, rather than commission or fee only. In the 2002 survey, 57% used the dual method compared with 48% in 1998 and 35% in 1994. The 2002 survey also showed that, for the first time, the percentage of fee-only advisors exceeded the percentage of those charging by commission only. In 2002, 26% said they were fee-only advisors, compared with 21% in 1998 and 18% in 1994. Commission-only advisors dropped to 11% in 2002, compared with 24% in 1998 and 35% in 1994.

"I think you're going to see that continue. It's a trend in the industry as there's been more and more disclosure. It's also an indication of the maturity of the profession itself. The profession is really only 30 years old, and somewhere down the road, you'll see the fee-only planner dwarfing any other kind of compensation," Arman says.

Fees have significantly increased since 1994. Unlike the findings in 1998, which indicated a prominent downward trend in fees being charged by financial planners for pure advisory engagements, the 2002 results showed an increase of 100% or more. Advisors participating in the 2002 survey charged median fees of $500 for a single-focus plan, compared with $250 in 1998 and $300 in 1994. For comprehensive plans, the median fee was $1,450 in 2002, $600 in 1998 and $750 in 1994.

Arman believes the 1998 survey showed fees dropping because during the roaring bull market, clients may have been a little less willing to pay as much for advisory services. The feeling, he says, was why go to a planner? You could throw darts and still get a 20% return. Now people are being more discriminating, and many realize they can't do it on their own, he says.

Also, the number of single-focus plans requested in 2002 was significantly lower than in 1998, while a significant increase was seen in the number of comprehensive plans requested over the same 12-month period. The 2002 outcomes suggest a significant shift in client requests from single-focus planning toward comprehensive planning and indicate that the typical client is now more interested in a wider spectrum of financial advisement services, the study says.

"As the profession matures and the public realizes the intrinsic value of financial planning, they are willing to see it in the same way as they see doctors, who dispense comprehensive integrated advice," Arman adds.

The Typical Client

The feedback from survey participants indicated that the typical client continues to be a two-income couple between the ages of 45 and 64, whose median income reflects a significant increase in both gross and net income from those reported in 1998. The typical client's annual gross income was $100,000, a 14% increase over the $87,500 reported in 1998.

Net worth was 30% higher, rising to $650,000 in 2002 from $500,000 in 1998. That also may seem surprising, given the bear market of more than two years. However, Arman observes the dramatic rise in real estate values in many areas of the country may account for the increase. Also, he speculates, individuals in other professions, such as law and accounting, who recently have become CFPs may be bringing in wealthier clients. And in spite of the bear market, people have continued to add money to their retirement plans, so net worth hasn't fallen off as it might if people stopped saving and investing all together, he says.

The study found no change in the typical client's annual discretionary income, which remained at $15,000 in 2002. But that number now represents just 15% of total gross income, versus 18% in 1998. Furthermore, planners report virtually all of the money set aside by their clients for savings are intended for retirement purposes.