{"id":550975,"date":"2026-07-15T13:09:11","date_gmt":"2026-07-15T13:09:11","guid":{"rendered":"https:\/\/www.newsbeep.com\/ie\/550975\/"},"modified":"2026-07-15T13:09:11","modified_gmt":"2026-07-15T13:09:11","slug":"how-ai-is-putting-pressure-on-the-advisor-fee-model","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ie\/550975\/","title":{"rendered":"How AI is putting pressure on the advisor fee model"},"content":{"rendered":"

Open this photo in gallery:<\/a><\/p>\n

AI is another free source of information for clients that may be accelerating the downward pressure on advisor fees.Nuthawut Somsuk\/iStockPhoto \/ Getty Images<\/p>\n

Two years ago, the Canadian Investment Regulatory Organization released the results of a survey<\/a> that found 44 per cent of Canadians who sought financial guidance from finfluencers and social media believe they\u2019re getting equally valuable information from these sources as from a traditional financial advisor. Adding salt to the wound, 12 per cent thought this information was more valuable. <\/p>\n

Now, artificial intelligence has entered the chat. So far, it hasn\u2019t eclipsed the value of advice in the minds of most Canadians, with a poll last August from Leger finding that only about one-third<\/a> of Canadians would trust AI to give them financial or legal guidance. <\/p>\n

But AI is another free source of information for clients. Kendra Thompson, principal and founder of Epok Advice in Toronto, sees it accelerating the downward pressure on advisor fees. <\/p>\n

She compares it to the tendency among millennials to crowdsource financial advice from family and friends. \u201cAI is just another person at that dinner party,\u201d she says.<\/p>\n

The trouble is, just like a brother-in-law, AI may be right or wrong, and it isn\u2019t controlled, audited or governed in the same way as the client\u2013advisor relationship.<\/p>\n

Clients aren\u2019t the only ones using AI tools, of course. Many firms have recognized AI\u2019s potential to boost efficiency within advisory practices. <\/p>\n

After all, AI is adept at analyzing large amounts of data, summarizing results and modelling multiple scenarios, says Sybil Verch, senior wealth advisor and portfolio manager at Raymond James Ltd. in Victoria, and founder of financial education and empowerment provider The Wealthy Life. It can also speed up onboarding, monitoring, reporting, follow-up and education.<\/p>\n

However, as advisors leverage AI to streamline their practices, clients may expect that greater efficiency will lead to fee reductions \u2013 another source of pressure on advisor compensation. <\/p>\n

To combat that expectation, it\u2019s important to demonstrate that the support AI provides behind the scenes makes it possible for advisors to increase high-value face-to-face time with clients. <\/p>\n

\u201cSpend as much time in front of clients as possible, because that\u2019s where you really uncover the opportunities to increase wealth, improve people\u2019s lives and provide peace of mind,\u201d Ms. Verch says. <\/p>\n

When clients see an advisor\u2019s fee tied to assets under management or to transactions, they assume they\u2019re paying for help making investment decisions \u2013\u202fand that\u2019s one place in which AI is encroaching. <\/p>\n

Ms. Verch says that, historically, when an advisor charged 1 per cent of assets under management, most of that fee was for portfolio construction and management. Today, with AI contributing to shrinking costs in those areas, the cost for advisors may be just 0.3 per cent to 0.5 per cent of assets. <\/p>\n

Financial planning and behavioural coaching are worth 1 per cent or more a year, in Ms. Verch\u2019s opinion, but clients need to understand that. <\/p>\n

Over the long term, fee models may need to adapt. That may mean paying a flat fee for a financial plan plus a monthly membership fee or hourly rate to access financial advice when needed, Ms. Verch says. But fee model evolution can be slow. <\/p>\n

Ms. Thompson says she\u2019s seen pricing innovation in specific segments such as multi-family offices and practices that offer hybrid advice to people who seek guidance only for major life events. <\/p>\n

Although much of the wealth management industry can\u2019t yet offer a menu of services priced separately, she says advisors can still explain all the services they offer and assign a value to each component. <\/p>\n

For advisors to shore up their value propositions, they need to show clients they\u2019re contributing to well-being in ways that aren\u2019t easy to commodify or replicate. <\/p>\n

For example, Ms. Thompson says, advisors can highlight their skill at navigating family dynamics, understanding different decision styles, handling the logistics of putting a plan into action and connecting clients with a network of experts. <\/p>\n

Unlike AI, a human being can provide counsel, community and contacts as well as emotional support, she says. <\/p>\n

\u201cI don\u2019t see a downtick in the need for advice, broadly, or the desire for validation through a licensed human, or the value of orchestration<\/a> and broader financial life support, which is ultimately where the full-service industry is pivoting,\u201d Ms. Thompson says. \u201cThat pivot started well before AI tools were sophisticated \u2013 and it\u2019s more urgent now.\u201d <\/p>\n

She says advisors shouldn\u2019t wait for clients to question their fees. Rather, there should be \u201cclear, deliberate, proactive expectation-setting around what your service model is and a revisiting of that value exchange as part of your ongoing client service.\u201d <\/p>\n

She adds: \u201cPlay to your strength. Play to the thing that\u2019s hard for an AI agent to replicate.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"Open this photo in gallery: AI is another free source of information for clients that may be accelerating…\n","protected":false},"author":2,"featured_media":550976,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[1116,72,176,11575,61,60,19293,174,175],"class_list":["post-550975","post","type-post","status-publish","format-standard","has-post-thumbnail","category-personal-finance","tag-appwebview","tag-business","tag-finance","tag-globe-advisor","tag-ie","tag-ireland","tag-noastack","tag-personal-finance","tag-personalfinance"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/550975","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/comments?post=550975"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/550975\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media\/550976"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media?parent=550975"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/categories?post=550975"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/tags?post=550975"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}