For financial advisors navigating the turbulent waters of client relationships and compensation models, the term "fee-based" is often misunderstood, especially when contrasted with its cousin, "fee-only."
To ensure we are on the same page, fee-based means financial advisors earn fees for services (like investment management) and commissions from selling products such as annuities and load mutual funds.
And yes, we know commissions often get a bad rap, but with the right approach, fee-based advisors can use digital marketing, websites, and full transparency to educate clients and build trusting relationships.
If you’re a Registered Investment Advisor (RIA) or Investment Advisor Representative (IAR) firm that wants to improve its online transparency and clarify that your fee-based model is a win-win situation for investors, then buckle up. We are going to cover the Top 12 Ways RIAs Can Market Themselves as Fee-Based Financial Advisors combined with proven digital marketing strategies that work the best.
Let’s take a minute and start with a few of the basics. You know this, but prospective clients may not. It’s crucial that your website clearly defines what “fee-based” means. Don’t assume website visitors know the difference.
Website visitors must know upfront that you’re compensated by fees for your advisory services and commissions for selling certain investment and insurance products. Make it obvious in plain language and preferably not in size-4 font tucked in the fine print at the bottom of your site.
Highlight the flexibility this offers. Fee-based advisors can provide a broader spectrum of services that sometimes include products essential to a well-rounded financial plan, such as long-term care insurance or annuities. By framing it this way, you present commissions not as something to be concerned about but rather as another tool in your toolbox that helps clients achieve their financial goals.
Sure, "fee-only" has its own fan club. But fee-based can hold its ground, especially when you are willing to practice transparency. The trick is to explain that your compensation model allows for selling products that can serve your client’s best interests—things fee-only advisors might not offer.
Showcase this distinction on your website’s compensation page. Don’t withhold this information. Instead, use comparison charts or graphics that break down how fee-only and fee-based differ, explaining how the flexibility of a dual compensation model allows you to recommend the best solution for each client’s unique needs. This avoids the perception that you’re tied to a narrow, cookie-cutter approach.
Clients are usually wary of the word “commission.” After all, no one wants to feel like they’re being sold something they don’t need. Here’s where you double down on your fiduciary duty. Use your website and content to underscore that, as a fiduciary, your advice is always in the best interest of your clients—when you are paid with fees.
When applicable, emphasize you are compensated with a fee for your planning and investment advice. Commissions may come into play when you are recommending various insurance products or investment products for smaller accounts that don’t meet your minimums.
You can add a dedicated page or section on your website that spells out the fiduciary responsibility and explains how it applies to all of your core planning and investment services. Use clear, everyday language so there’s no room for confusion.
Website transparency is no longer just a buzzword; it’s the bedrock of building trust with your future clients, especially for fee-based advisors. Start with the basics.
Your fee structure shouldn’t be hidden behind a “click here to contact us for more info” button. Instead, be upfront. Display your fees on your website with examples of how commissions factor in.
Even better? Use your blog and social media channels to reinforce transparency. Share case studies (without violating any client confidentiality, of course) or create FAQ-style posts that address common client concerns, like how commissions are calculated or when they come into play.
The best way to market your fee-based structure is to flaunt its versatility. Make it a point to emphasize that being fee-based allows you to offer a wider range of services than your fee-only peers. Explain how this model enables you to recommend essential products, like insurance that may be in the client’s best interest.
Show examples on your website or blog posts where clients benefited from a fee-based approach. For instance, a fee-based model might have allowed clients to secure life insurance coverage seamlessly without going through a third-party broker. Personal stories resonate on financial advisor websites and can make all the difference in conversions (visitors to leads, leads to prospects, prospects to clients).
If you think digital marketing stops at your website, think again. Blogs and social media should be your new best friends. These platforms allow you to explain the nuances of your fee-based model and why it works in your client’s favor. Regular posts that break down complicated financial jargon in layman’s terms will position you as a trusted expert.
Consider blog titles like "Why Fee-Based Compensation Works for Your Financial Goals" or "Debunking Myths About Commissions in Financial Planning." These types of content not only help SEO (so clients can actually find you) but also establish credibility and transparency.
It's no secret that commissions often get a bad rap, especially when selling life insurance products. However, fee-based advisors can flip this narrative by explaining that certain commission-based products are necessary for a well-rounded financial plan. For example, a survivorship policy can be used to cover estate taxes.
Use your website to walk clients through the products you sell for commission—like life insurance or annuities—and explain why these products are in their best interest. Don’t just tell them what you sell; show them why it matters.
No one likes being left in the dark. Offering concrete examples of when commission-based products make sense helps remove skepticism. For example, highlight how life insurance or annuities can provide financial security for clients nearing retirement, making commissions a natural part of your compensation.
This is also a great opportunity to integrate testimonials or case studies from satisfied clients who have benefited from commission-based advice and services.
Don’t shy away from explaining trailing commissions if they apply to your practice. This type of compensation is paid out over time for selling certain products. Full transparency means not waiting for clients to ask about it—address it upfront.
Explain trailing commissions on your website's FAQ page or through an educational blog post. Make it easy to understand because if clients are left to Google the term, you’ve missed an opportunity to control the narrative.
One way to soothe client concerns about commissions is to be upfront about what products generate commissions and those that don’t. This applies particularly well when your investment advice and services are fee-only, and commissions are reserved exclusively for insurance products. It’s important to reassure clients that you’re not double-dipping on investment products.
Adding this distinction to your website’s compensation section is critical. Ensure there’s no ambiguity about where the commissions come from and how they affect your services.
As a fee-based advisor, you likely operate under dual regulatory supervision—SEC for fees and FINRA for commissions. Clients may not be aware of the regulatory maze you navigate, but clarifying this on your website can lend further credibility to your firm’s business model.
Include a brief explanation on your site that outlines how these regulatory bodies impact your compensation and oversee the different aspects of your business. This will show that you’re playing by the rules, which builds trust.
Fee-based compensation models offer flexibility for smaller accounts, too. For clients with larger and smaller investment portfolios, fees may apply to larger accounts and commissions to smaller accounts. Meanwhile, investors are getting all of the services they need from one coordinated source, regardless of account size.
This opens up opportunities to serve clients that fee-only advisors might overlook. Highlight this aspect in your website’s services section to show that you have solutions for clients at every stage of their financial journey.
Fee-based compensation doesn’t have to be the elephant in the room. With full transparency, you can use your website and digital marketing strategies to show clients that your compensation model aligns with their best interests—whether using fees or commissions to compensate you for your knowledge, advice, and services.
By clarifying the distinction between fee-only and fee-based, offering examples of when commission-based products make sense, and explaining your fiduciary duty, you’ll build online trust and attract clients who understand the value of a dual compensation structure. Keep the conversation going on your website, blog, and social media to showcase how fee-based works for you and your clients.