Most advisors understand the rollercoaster that comes with managing a fee-based business. When markets are soaring, things feel great—AUM grows, revenue climbs, and clients feel confident.
But when markets drop?
So does revenue. And client confidence. And sometimes, advisor peace of mind.
For those relying solely on assets under management (AUM) fees, this volatility can lead to unpredictable income—and a lot of stress. That’s why more advisors are diversifying their revenue models by adding financial planning fees as a stable, service-based stream of income.
Let’s take a closer look at why this shift is gaining traction—and how it can help future-proof your practice.
The Challenge with AUM-Only Revenue
When your revenue is tied directly to market performance, downturns don’t just impact clients—they impact you.
According to a 2023 Kitces Research study, the median revenue loss for AUM-only firms during a 20% market drop is between 15–18%, depending on fee tiering and client mix. That drop is felt immediately—even though your workload may actually increase during volatile periods.
The paradox: You’re doing more hand-holding, more planning, and more communication—but you’re getting paid less to do it.
Advisors in this model often find themselves trapped between wanting to provide stability for clients… while feeling unstable themselves.
The Case for Planning Fees as a Second Income Stream
Adding financial planning fees—whether flat-fee, subscription-based, or complexity-based—introduces a revenue stream that is:
- Unrelated to portfolio performance
- Recurring
- Tied to your advice and value, not the market
When markets are down, clients need more guidance. Planning fees let you get paid for that value, without relying solely on AUM.
A 2022 FPA Trends in Practice Management survey showed that over 41% of advisory firms now charge financial planning fees, with most using them as a complement—not a replacement—for AUM.
Benefits of Adding a Planning Fee Model
1. Revenue Stability During Market Volatility
Your clients still have questions, goals, and decisions to make—regardless of what the S&P is doing. When you charge for financial planning, your business is supported by a steady, predictable stream of income even when portfolios shrink.
2. Better Client Retention
Clients are more likely to stick with you when they feel supported—especially during stressful times. Financial planning fees encourage ongoing communication, increase perceived value, and reduce attrition during downturns.
Research from Cerulli shows that clients who receive consistent planning updates are 50% more likely to retain their advisor during a market correction.
3. More Value-Driven Conversations
Instead of focusing only on investment performance, you shift client conversations toward goals, progress, and decisions—areas where you can actually control the outcome. That helps build trust and loyalty, even in difficult seasons.
How to Integrate Planning Fees (Without Overhauling Everything)
You don’t need to reinvent your practice overnight. Many advisors start by:
- Offering tiered service models that include planning at different price points
- Charging flat fees for one-time planning engagements or plan refreshes
- Creating ongoing planning subscriptions for clients who want more frequent support
Want even more alignment? Consider complexity-based pricing, which scales based on the client’s financial needs—not just their portfolio size.
It’s a model that feels fair, client-centric, and completely independent of market turbulence.
Building a More Resilient Practice
Adding financial planning fees doesn’t just help your bottom line—it strengthens your client relationships, improves consistency, and positions you as a true partner in all market conditions.
And best of all? You no longer have to work harder for less when the market dips.
How NovaTrak Can Help
If you’re looking to confidently introduce or scale your financial planning services, NovaTrak gives you the structure, visibility, and support you need to succeed.
With NovaTrak, you can:
- Deliver clear, client-ready action plans that justify planning fees
- Track goal progress and accountability, so clients stay engaged
- Maintain a dashboard of all client milestones to keep your process consistent and repeatable
- Show your clients tangible value, no matter what the market is doing
Whether you’re adding planning fees for the first time or optimizing your current model, NovaTrak helps you turn planning into a sustainable, scalable part of your business.
Schedule a demo today and see how NovaTrak can help you grow revenue—and resilience—through every market cycle.