Fee Advisor Journal | June 2025
73% of private bankers and financial advisors managing private and HNWI clients agree that fee-based advice guarantees greater overall profitability than offering commission-based products.
This percentage drops to 34% when the same question is posed to bank managers or financial advisors managing affluent clients.
For the majority of professionals serving high-net-worth clients, fee-based advice allows them to maximize their work (66%), ensuring maximum transparency (59%), and avoiding conflicts of interest related to the offering of specific products (49%).
This is also true among private and HNWI clients, 72% of whom would be willing to pay a fee for financial advice provided by their advisor in exchange for optimized commissions on the individual products they subscribe to.
On the other hand, 66% of those managing affluent clients have serious doubts about their clients’ willingness to pay a fee, having never paid one in the past.
This finding also reflects supply and demand: only 15% of lower-net-worth clients would be willing to pay an advisory fee to their investment manager.
Supply and demand are therefore closely aligned, and this could lead to the hypothesis of two different service models.
A fee-based advisory model for high-net-worth individuals who can count on a qualified professional and a more personalized service could coexist with another model characterized by a more standardized level of service based on product-specific commissions.
The coexistence of the two models, however, will only be possible until the “Retail Investment Strategy” (RIS), the package of European reforms aimed at protecting retail investors and improving transparency in financial markets, is implemented.
In anticipation of the arrival of the RIS, it would be useful to begin developing fee-based service models for all clients, regardless of their wealth.
In an ideal world, the amount of the fee should be related to the different commitments of time, resources, and energy required of the advisor and therefore, ultimately, to the level of service provided to the client.
To offer a quality service at lower average costs and for less wealthy client segments, automation and the implementation of more standardized models through the use of Generative Artificial Intelligence will be helpful.
The same support guaranteed by Generative AI will also be provided to private bankers and wealth managers who manage high-net-worth clients, but for them, the role of the banker will remain essential.
Furthermore, high-net-worth clients—private individuals and HNWIs—are on average more cost-conscious than their affluent counterparts: the real issue, therefore, is value for money, or the price-quality ratio.
We can therefore assume that fee-based advisory services will soon be accessible to all, albeit with varying levels of time and resource commitment on the part of the financial advisor.
The democratization of investments therefore also involves fee-based advisory services.
Nicola Ronchetti