Charging for Wisdom

Pullen, Courtney
August 2003
Journal of Financial Planning;Aug2003, Vol. 16 Issue 8, p24
Academic Journal
This section presents the author's observation on a proposed shift in compensation models in the financial planning field. Several prominent thinkers in the financial planning field have been challenging the profession to take a look at how it is compensated. They are advocating a move from a compensation model based on assets under management (AUM) to a retainer model. With a retainer model compensation is based on one's knowledge, wisdom and service. The beauty of this shift in thinking is that it clarifies what financial planning is and what the planner has to offer a client. The wisdom needs to be delivered via the client/planner relationship. Wisdom is the product. It is what the client needs and is asking for. This shift represents a change not only in one's thinking but also in how an individual see himself or herself. It has the potential to expand one's field of play, influence and impact. The primary obstacle in moving to a retainer model is the mindset of the advisor. As an advisor to financial planners, it makes sense to me for planners to consider moving an AUM model to a retainer model. A retainer model clarifies the planner's value and what one have to offer. It affords the opportunity to generate higher fees and ultimately, it speaks to the soul of a planner's work.


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