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What will it take to make the fee plan for the service more available?

That environment contributes to a widespread lack of financial literacy, which creates challenges for planning professionals like Thompson. While there is no shortage of coverage on the stock markets, other areas of personal finance such as debt management, insurance planning, taxes and savings have declined. Since those subjects were not typically taught in high school, Thompson says that many of his interactions with young clients and potential clients focus on financial education.

“I think in general, people should have a better fundamental understanding of what’s important when it comes to their personal finances,” says Thompson.

While much has been said about how fee-based investment models can better align the interests of advisors and clients than commission-based models, there are points that advisers who focus on investing efficiently. If so, it will be more difficult for them to go fee-based. Given the limits of what investment advisors can spend with each client under the traditional model and the investable assets of young Canadians, a fee-based investment management model may not be available to those young Canadians. They do not have enough assets to meet the minimums of most fee-based advisors.

“From a financial planning standpoint, it makes all the sense in the world to have a fee-based model,” says Thompson. “But if your bread and butter is investing and managing relationships, and you’re doing this in hundreds of households in hundreds of thousands of homes, you might want to consider a fee-service practice a worthwhile one from a time-and-compensation standpoint. Can’t take it as an effort.”

She also argues that advisory networks and firms have a role to play in supporting fee-based practices. In traditional money firms, they feel that there isn’t much infrastructure to support a variety of fee-based business models other than a fee-based investment model. Since many advisors will consider creating a fee model from the outset and implementing it into their practice as a larger undertaking, Thompson believes that wealth managers, brokerages and dealers will be able to incorporate infrastructure into their offerings. will be able to meet the pressing needs of the market.

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