By Zoey Thompson
Indianapolis, IN – Assets under management (AUM) fees were a popular way to charge for financial management because it aligned the client’s goals with that of the financial professional. The commission-based sales model wasn’t very good for the client because regardless of performance, the adviser received payment. While it was a huge step up from the previous model, it ignored the entire concept of economies of scale. It takes the same amount of time to manage a large account as a small one—especially in an industry that embraces technology the way the financial industry has. Business services must evolve just like any other and companies like Ploutos Wealth are now advocating that this model be done away with and that financial advisors move towards a flat fee or subscription model.
“There are just too many alternatives out there for our clients,” says Ploutos Wealth’s CEO Paul Coan. “You just cannot get away with practices that feel unfair or don’t meet our fiduciary responsibilities, not in twenty-eighteen. Our job is to advise financial professionals in what works, and the A-U-M model just doesn’t work, anymore.”
The traditional model investing is a thing of the past, according to Coan. Subscribing to strategies not only provides clients with investments that work, but also creates a relationship of trust between financial advisor and client. Trust means retention and referrals. “Become the financial advisor everyone wants,” urges Coan. “Give clients solutions that work.”
Ploutos Wealth urges financial advisors to provide “insourcing;” manage money without outsourcing or sub-advising and then enabling Ploutos Wealth to advise on what and when to buy. There are no fees per client. One flat fee that can be used for one or a thousand clients. This frees up time for the financial advisor and controls costs. Ploutos Wealth contains a team of financial professionals who have spent decades in the industry researching investments for top-tier firms. They do the research, and advisers white label the results.
The firm now offers lower rates for new clients. For more information their website.