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10 July 2025 by Maja Garaca Djurdjevic

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US moving towards fee for service

  •  
By Christine St Anne
  •  
4 minute read

The US financial planning industry is shifting away from a commission-based advice model, a US consultant has said.

The US financial planning industry is shifting away from a commission-based advice model as fee-based advisers report increased business, a US consultant has said.

US advisers who use a fee-for-service model are securing more business as investors move towards fee-based advice, Casey, Quirk & Associates partner Ben Phillips said at a CFA Institute function in Sydney yesterday.

"We are finding that fee-based advisory sales are increasing as US investors now see this form of advice as good advice compared with a commission structure. In a financial crisis, investors have traditionally flocked towards advice and products that use commissions," Phillips said.

"In this financial crisis it has been very interesting as we are seeing an increase towards fee-based advisers."

 
 

Sales garnered by fee-based advisers have increased from 25 per cent in 2008 to 30 per cent over the following quarter, according to the firm's research.

Phillips said these advisers are letting their clients know that "we can help you during this crisis with independent advice. We are not here to sell a product."

US fund managers are already looking to alternative sources of revenue, rather than relying on the traditional adviser distribution models, according to the firm.

Phillips said the Securities and Exchange Commission (SEC) intends to travel down the same path as the FPA in issuing a consultation paper that would outline the industry's approach to transitioning to a fee-for-service model.

"The SEC was hoping to facilitate a similar approach to the FPA. However, they subsequently became tied up with some market events," he said. 

Last week, the FPA released a member consultation paper on financial planning remuneration that recommends all members move to a fee-based or a client-directed remuneration model by 2012.