What’s more, adding a service comes with a downstream necessity in the form of additional staff or technology. If advisors want to preserve their profitability, they have options other than adding and raising fees, the report said. Those include using fixed financial planning fees, or adding on monthly subscription fees for certain services.
If a service doesn’t benefit all of an RIA’s existing clients, however, this might be the time for the firm to lean in to its discipline, Shtyrkov said.
“These are the external influences that are going to encourage RIAs to think about expansion, but that decision should not be made lightly. It comes with a lot of considerations, and a firm should weigh its options,” she said. “I would not want to suggest that all RIAs must add services otherwise they won’t be competitive.”