Skip to main content
utility-drawer__close
0
Add funds
Fund 1
Fund 2
Fund 3
Fund 4
Confirm your location and role
location select
language select
Advisor Education

Set yourself fee: Why (and how) top financial professionals switch to a fee-based structure

Robert Kron
Managing Director, Advisor Education
Hero image

One of the most significant potential benefits to shifting to a fee structured practice is that a financial professional can maximize their talents by offering their clients access to greater breadth and depth of financial planning services. Still, the idea of incorporating a new pricing structure can be daunting for both professionals and clients (change is challenging). It helps to approach it in three phases:

 

Phase 1: Adaptation = a mindset for action

It helps to understand that incorporating a fee-based component to a practice – or shifting business to entirely fee-based - may provide greater opportunities for financial professionals to expand their practice. Why? Because by its very nature, a financial professional who focuses on exclusively on buy/sell transactions will eventually maximize the number of prospects and clients they can meet. Furthermore, they’re limited in the types of financial planning services they can offer – not only in the time it takes to provide those services but also by how they would be compensated for those other services.

One of the greatest motivators of change is recognizing the potential for positive results. As we’ll see, incorporating a fee-based structure into a practice may provide positive results on both sides of the relationship.

Phase 2: Education = knowing your clients—and the numbers

Let’s look at clients and what they crave from their relationship with a financial professional:

Factors that drive client satisfaction

As clients share what matters most to them, you can see that while investment performance is clearly critical, clients prize the total relationship they have with their financial professional. It’s important for a financial professional to gain a holistic knowledge of the client, which will consistently inform their financial life journey, understanding this knowledge should encompass:

  • Their career, current goals and financial life now
  • Their family and how that shapes and drives their decisions
  • Their retirement plans
  • Their future and legacy goals

Deeper relationships take time and a dedicated effort to provide additional services that address a client’s expanded financial picture. And that demands a commitment to educating yourself on what matters most.

And here, a hard truth presents itself. A financial professional who bases their practice on transactional or brokerage models—making individual trades versus creating a holistic financial portfolio—will lack the time to understand and develop these “total relationship” elements. And as a result, the client relationship may not be as strong.

In sum, the transactional model stresses buying and selling as the critical revenue driver. The financial professional who executes business at the buy-and-sell level may not have the time- nor the resources-to engage “the whole client.”

Phase 3: Transformation = stressing relationships

Saying so long to a transaction-based model may empower you to make one of the most significant improvements possible to your practice. The facts point out both what doesn’t work (a “par for the course” shortcut to a relationship) and what does—providing your client more of you:

  • More time to build and foster a connection
  • More time to learn about them
  • More time to embrace their lives and goals, financial and otherwise

The graphic below illustrates how the top financial professionals who build and nurture deeper client relationships have more of their clients, too. To be clear, they do not have more clients; in fact, many times they actually have fewer. But less is more when a financial professional realizes more accounts with their current clients.

Top financial professionals have deeper client relationships

Think about this graphic. Advisors who establish fuller relationships with clients who are fewer in number, but generate greater amounts of business, boast an attrition rate of just 1%. Translated, say, to an election result or a batting average, 99% would equal a triumph of unheard-of proportions. Especially when working in lockstep with expanded sets of expertise and services, relationship longevity benefits clients and advisors alike.

When financial professionals move to offer services and construct portfolios that address their clients’ goals, versus buying and selling client investments, something incredible begins. In sum, the advisor can successfully attend to multiple accounts for each client. A successful fee-based financial professional gains the time (via fewer clients) and the resources (via fee-structured investment platforms and technology) to grasp and guide a client’s entire financial picture. Transition is truly cultivation. The total relationship, so important to both parties, prospers.

What does a future of fee-based business opportunities look like, then? This graphic illustrates more of what’s possible:

A fee based structure

This creates a foundation for efficiency, too. Clients can speak with financial professionals knowing their concerns matter; financial professionals can in turn work with their operations team to use everyone’s time wisely and make financial success possible. (If your practice lacks this capability, consider third-party consultants who can provide all the help you need.)

Five key takeaways:

  1. Clients place the highest priority on one benefit: that their financial professionals develop a broad, deep understanding of their total financial picture.
  2. Successful financial professionals who enjoy strong, deep relationships with clients have fewer clients, but more accounts with them.
  3. The transactional or brokerage business structure may naturally hinder financial professionals who want to build this deeper relationship.
  4. The transition to a fee-based structure is easier than it seems.
  5. Practice the same self-patience you would advise your clients to use.

If you have questions or would like to explore how Nuveen can further support your efforts to grow your business, reach out to your Advisor Consultant or call 800.221.9271.

Related articles
Advisor Education How to talk to clients about … Alternative investments
Expand wallet share and deepen trust by helping clients meet diverse investment goals.
Advisor Education Turning tax concerns into planning opportunities
Visibility into what is scheduled to change at the end of 2025 creates opportunities to minimize investors' taxes over the next three years and beyond.
Advisor Education A multiyear portfolio tax strategy
The opportunity to continue to take advantage the Tax Cuts and Jobs Act (TCJA) provisions while also preparing for their potential elimination.

The views and opinions expressed are for informational and educational purposes only as of the date of production/writing and may change without notice at any time based on numerous factors, such as market, economic or other conditions, legal and regulatory developments, additional risks and uncertainties and may not come to pass. This report contains no investment recommendations and should not be construed as specific tax, legal, financial planning or investment advice. This material may contain “forward-looking” information that is not purely historical in nature. Such information may include, among other things, projections, forecasts, estimates of yields and/or market returns, and proposed or expected portfolio composition. Moreover, certain historical performance information of other investment vehicles or composite accounts managed by Nuveen may be included in this material and such performance information is presented by way of example only. No representation is made that the performance presented will be achieved, or that every assumption made in achieving, calculating or presenting either the forward‑looking information or the historical performance information herein has been considered or stated in preparing this material. Any changes to assumptions that may have been made in preparing this material could have a material impact on any of the data and/or information presented herein by way of example.

The information provided does not take into account the specific objectives or circumstances of any particular investor, or suggest any specific course of action. Investment decisions should be made based on an investor's objectives and circumstances and in consultation with their advisors.

This material is not intended to be relied upon as a forecast, research, a recommendation or investment advice, and does not constitute an offer or solicitation to buy or sell any securities or to adopt any investment strategy, and is not provided in a fiduciary capacity. The information and opinions contained in this material are derived from proprietary and non‑proprietary sources believed to be reliable, but not necessarily all‑inclusive and its accuracy is not guaranteed. There is no representation or warranty as to the current accuracy, reliability or completeness of, nor liability for, decisions based on such information and it should not be relied on as such.

There is no guarantee that any forecasts made will come to pass. Company name is only for explanatory purposes and does not constitute as investment advice and is subject to change. Any investments named within this material may not necessarily be held in any funds/accounts managed by Nuveen. Reliance upon information in this material is at the sole discretion of the reader. Views of the author may not necessarily reflect the views of Nuveen as a whole or any part thereof.

For term definitions and index descriptions, please access the glossary on nuveen.com. Please note, it is not possible to invest directly in an index. Performance data shown represents past performance and does not predict or guarantee future results. Investing involves risk; principal loss is possible.

Important information on risk

Past performance is no guarantee of future results. All investments carry a certain degree of risk, including the possible loss of principal, and there is no assurance that an investment will provide positive performance over any period of time. Certain products and services may not be available to all entities or persons. There is no guarantee that strategy’s investment objectives will be achieved.

Economic and market forecasts are subject to uncertainty and may change based on varying market conditions, political and economic developments. This report should not be regarded by the recipients as a substitute for the exercise of their own judgment. It is important to review your investment objectives, risk tolerance and liquidity needs before choosing an investment style or manager.

Aerial view of the ocean shore

You are on the site for: Financial Professionals and Individual Investors. You can switch to the site for: Institutional Investors or Global Investors

You are about to access our website for visitors outside of the United States.

You are about to access our website for Nuveen Global Cities REIT

You are leaving the Nuveen website.

You are leaving the Nuveen website and going to the website of the MI 529 Advisor Plan, distributed by Nuveen Securities, LLC.

The Nuveen website for institutional investors is available for you.

You are about to access our website for visitors outside of the United States.

You are about to access our website for Nuveen Churchill Private Capital Income Fund (“NC - PCAP”)

Contact us
Contact us
Back to Top