It seems that fees charged by financial advisors aren’t as secure as they once were. For starters, the emergence of low-cost digital advice platforms has caused many investors to question the traditional fee model based on assets under management. Then there was the dramatic plunge in U.S. equity prices in March that filled advisors with angst as they saw equity prices—and their firm’s AUM levels—sink like a stone. Finally, greater adoption of the fiduciary model means less commission-based fees. Add it up, and it’s enough to make many advisors rethink their business model.

In a recent report, the financial services industry research firm Aite Group proffered a solution for advisor firms that are rethinking their business models and looking for additional revenue sources.

“Wealth management firms have an opportunity to convert a service they have already been providing for little compensation—financial planning—into a new revenue stream using their newly developed digital advice platforms to deliver advice at scale,” Aite said in its report entitled “Subscription Pricing Models for Digital Advice: Where’s the Sweet Spot?”

The report surveyed 400 advisors and found that less than 20% of advised clients pay a fee for financial planning even though most practices spend as much time on planning as they do on investment management.

Aite noted that financial planning is of high value to clients, especially in times of high stress and uncertainty such as the current pandemic-fueled reality.

“Charging for advice is likely to become a more mainstream idea,” the report said.

Aite’s report also surveyed 2,545 consumers, of which 622 have a household income of at least $100,000. The respondents were classified as senior millennials (29 to 39 years old), Generation Xers (40 to 54 years old) and baby boomers (55 to 73 years old). More than 80% of these folks have at least one investment account.

Aite asked affluent consumers (i.e., those with income of at least $100,000) about their receptiveness to getting online financial coaching and advice, and the upshot is that a majority of affluent Gen X and millennial investors are looking for financial advice and are receptive to both receiving it from a digital service and paying for it. The majority of baby boomers, on the other hand, aren’t on board with that.

Nonetheless, a number of hybrid advice solutions with both human and robo elements have come to market during the past four years and tapped into younger investors’ interest in receiving low-cost digital advice. These platforms run the gamut in terms of investment minimums and pricing structures.

For example, the premium version of Charles Schwab’s robo-advisor Intelligent Portfolio Management platform has a $25,000 minimum balance, charges a one-time $300 initial planning fee and a $30 monthly fee after that for unlimited one-on-one guidance from a certified financial planner.

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