We, Indian IFAs thankful to you for sharing first hand info on the percentage of fee based Advisers in US (i.e. 17%). As universal principle of 90-10 rule, very few IFAs have conviction and ability in terms of knowledge as well as priority of client interests first, who are charging fees from clients. Secondly we have to decide who are our target clients in a focused way and see, whether they can afford and willing to pay fee or not. Being a Fee based adviser, if you can show how you can add value to the client by showing some numbers and value added services which a simple product distributor cant afford to render, then definitely you get your fees. Unfortunately its IFA who dont ask fees where as an educated client is willing to pay the fees. But I am sure, a fee based IFA commands respect and dignity from his clients unlike Distributors who do not charge fees.

I must say that very nice article, giving confidance for opting fee base model. My experience is, fee base model gives dignity & status to the profession.

Approaches can be different from country to country and even from segment to segment within the country. It can also be different from the business model adopted by the advisors. Blindly following a certain model because it has been successful in some other country without having any similarities in the ground realities would not be proper.

Fee based advisory may be good for HNI clients but in small cities where people are not investing in mutual fund and it is very difficult to get business from client without advisory fees and some advisers are doing pass back to get business.Advisory model is not working in insurance,post and other financial assets.Most people in India is not accustomed to pay fees for financial products so I think fee based advisory is not fit for all and till Indian market mature to that extent.

Rick Kahlers work is indeed impressive. However expecting that the fee based transaction would be a reality is too much. I very much believe that AMCs must also support this change however it will still be a long and arduous road. The commission structure for Mutual Funds is now really at its bottom, also with Upfront to go it will be more better for Clients and Advisors.

If client pays Advisory Fees to planner/advisor, Transaction/Service fees to distributor, Fund Management fees (Expense Ratio) to MFs, Capital Gains Taxes to government, Inflation (invisible fees) to economy, then what is left to client in terms of net returns? People expect to get major share of investment returns to themselves rather than to supply chain in the middle! Fee-only model seems not practical, be it in U.S. (only 5% are fee-only advisors!) or in India.

Its rightly said, dont be afraid to ask for a fee once you have required qualifications & skills. Its indeed a hard path but the difference between Plannner & agent is immense once you are able to discover & identify yourself.

Dear Vijay ji Very insightful information share from Rick Kahler. It helps to understand the future of Fee based financial services.

I must NOT ever consider fee based model.

Excellent and appropriately written article.