The Bitter Pie: Financial Advisors Industry Statistics
The industry I am in confounds me. Why are so many consumers so poorly served? Almost daily I hear stories of advisors hiding fees, not calling people back after initially selling them something, and having “advice” really mean selling people products they don’t need.
Most advisors operate with conflict-of-interest imbedded in the way that they operate. Advisors who make money by using a commission AND charge people for their advice, the “fee-based” advisors, are the worst. Next bad are the advisors who just charge commission. These business models are ripe for corruption; the advisor builds trust then recommends a solution to a problem that makes the advisor the most money.
Fee-only advisors operate with less conflict of interest. In fact, most fee-only advisors pledge to put the interests of their clients ahead of their own. However operating fee-only generally means charging based on the amount of assets that you’re managing. That leaves clients with inadequate advice with their two of their biggest challenges—real estate and taxes. The ACA retainer model avoids the pitfalls of all the other business models. The advisors in ACA believe we have a better MO.
However, the pie chart above shows our market share in the industry.
Yikes! We’ve got a lot of work to do.