{"id":6074,"date":"2010-05-03T09:13:00","date_gmt":"2010-05-02T22:13:00","guid":{"rendered":"https:\/\/riskinfo.com.au\/news\/?p=6074"},"modified":"2020-02-06T08:10:06","modified_gmt":"2020-02-05T21:10:06","slug":"trend-to-flat-dollar-fees","status":"publish","type":"post","link":"https:\/\/riskinfo.com.au\/news\/2010\/05\/03\/trend-to-flat-dollar-fees\/","title":{"rendered":"Move to Flat Dollar Fees?"},"content":{"rendered":"

Many financial advisers transitioning to fee for service will\u00a0eventually arrive at a flat fee advice model,\u00a0not an asset based fee model, according to Elixir Consulting<\/a>.<\/p>\n

Elixir MD, Sue Viskovic<\/strong>, acknowledges a recent study from Investment Trends<\/a>, which points to a growing preference by advisers for\u00a0asset based fee models (see: Strong Trend to Asset Based Fees<\/a>…).\u00a0 However, Ms Viskovic contends\u00a0this shift to asset-based fees “… is indicative of the fact that shifting straight from a commission model to flat fees is a quantum leap for many advisers and their clients.”<\/p>\n

Positioning the asset based fee model as a stepping stone to flat fees,\u00a0Ms Viskovic says her firm is seeing evidence that advisers who are new to the industry and those who have already been charging asset-based fees for some time are now thinking in terms of flat fees when they discuss fee for service:<\/p>\n

… growth in the use of flat fees will be significant in the next few years<\/h6>\n

“We predict that the growth in the use of flat fees will be significant in the next few years,” said Ms Viskovic, who maintains\u00a0that many advisers are beginning to choose flat dollar fees after they have conducted a thorough analysis of the pros and cons of the asset and flat fee options:<\/p>\n

“Many are now commenting that if they’re going to do all of the work required to move to fee for service they may as well do it completely – especially if there is some risk that asset-based fees may be out of favour in future” added Ms Viskovic.<\/p>\n

As well as the mindset of advisers, Elixir says other, more practical, impediments to using flat fees to date have included:<\/p>\n