A new registered investment advisory (RIA) firm, AdviceOnly, is challenging the traditional fee structures in financial planning. The San Diego-based firm recently secured approval from the Securities and Exchange Commission (SEC) to register as an RIA. According to Financial Planning, AdviceOnly aims to provide financial advisors with a flat-fee alternative to the industry's standard assets under management (AUM) model.

AdviceOnly plans to support advisors who reject AUM fees and instead charge clients fixed or subscription-based fees. The firm offers advisors a full suite of services, including compliance coverage, errors and omissions insurance, technology support, and a continuity plan, all for an annual fee of $18,000. Advisors can operate under the AdviceOnly brand or maintain their own, and they will be classified as independent contractors.

Despite the push for alternative fee models, AUM fees remain dominant. According to a 2023 industry report from the Investment Adviser Association and compliance firm COMPLY, 95 percent of SEC-registered RIAs collect AUM fees, while only about 5 percent operate without them. However, the report also found that firms without AUM fees account for nearly one-fifth of all industry clients, suggesting a growing demand for alternative pricing structures.

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