We need new models to reach more people who need help. The number of financial advisers is shrinking. The number of clients they serve is shrinking. But the opportunity is enormous – to do good, to grow our businesses and our sector.

That was my overriding takeaway from our fifth NextWealth Live conference last week. But the question remains, what models will thrive and why? That’s what we focus on at NextWealth. Understanding the business and operating models of advice, the tech powering those businesses and the investment solutions that support clients in achieving their objectives.

And we’ve been looking closely at business models and operating models for financial advice firms. Just this week, we published a report on fee benchmarking.

• Clients of on-going advice perceive strong value in the fees they pay for advice.
• While asset-based charging dominates, a growing number of firms offers a variety of charging models.
• A clear preference for fixed fees exists among younger clients (under age 55). Clients paying fixed fees also perceive greater value from the fees they pay.

This puts pressure on platforms to offer financial advisers flexibility in the way that fees are charged. They need to support cap and collar models, fixed fees, ad-hoc charges, etc. It also introduces complexity into advice firms. While there is a desire for consistency, they also want to support a variety of models to meet the needs of a large and diverse client base. Download a sample of our Fee Benchmarking report here.

Another factor impacting business models for financial advice is the role of PE and consolidation. Our next Consolidators and Aggregators report is out next week. While the volume of deals has slowed, there is plenty of activity in the market. We’re also seeing a steady shift toward vertical integration among PE backed advice firms. While many remain independent, they increasingly offer their own funds and discretionary MPS.

In our forthcoming Consolidators and Aggregators report we calculate the proportion of firms that offer their own MPS, funds and platform. Firms are increasingly looking vertically integrated, again an important shift in the model with implications for DFMs, platforms and asset managers. Many of these firms are using their vertically integrated solution to support clients with simpler needs. They can do this at a lower cost because of the integration across tech, product and advice.

The opportunities to innovate and thrive are enormous. The opportunity to help more people who need help even greater. We need to remain enthusiastic as we reimagine wealth management. I’ll close with a quote from Roald Dahl, cited by one of our speakers last week.

“I began to realise how important it was to be an enthusiast in life. If you are interested in something, no matter what it is, go at it full speed. Embrace it with both arms, hug it, love and above all become passionate about it. Lukewarm is no good.” -Roald Dahl

Enthusiasts unite! Let’s grab hold of the opportunity to help more people who need help.

Heather Hopkins

P.S. – save the date NextWealth Live 2026 will take place on 18 March