Charging for Financial Planning: How One Firm Established a Membership-Based Model

In a recent RightCapital webinar, Ron Bullis, Co-Founder and CEO of Lifeworks Advisors and the Future of Advice Academy, laid out a practical framework for building a pricing model that aligns fees with value and wins next-generation clients. Lifeworks has served more than 2,000 households since launching in 2017, built largely on a membership-based pricing model.

According to Bullis, the average RIA offers 15 different services, yet 96% of industry revenue comes from a single source: assets under management (AUM) fees. Whether an advisor delivers one service or fifteen, the stated fee for a $1 million client is almost always 100 basis points. That can mean some clients are overpaying while others are underpaying.

Ron presents another option:

Why is the traditional AUM fee model under pressure?

The typical gold standard of 1% AUM as a business model is not really that old. Don't just accept that as the right pricing structure or the right business model for you to win in the future. There could be a different business model or an adaptation that's more attractive to your client.

The standard 1% AUM fee has been the industry's default for roughly two decades, but, according to Ron’s research, several forces are challenging it:

• The great wealth transfer is underway: Between $40 and $100 trillion will change hands over the next 10 to 20 years as baby boomers (holding about 50% of all U.S. wealth and 70% of publicly traded securities) age out of their peak years. The oldest boomers are now 80+.
• Heirs are not keeping their parents' advisors: Research from Cerulli Associates shows that 70% of heirs are likely to stop working with their parents' financial advisor when they inherit wealth.
• Next gen clients expect different pricing: Millennials and Gen Xers grew up with free online trading platforms. According to Ernst & Young's Global Wealth Management Report, most wealth management clients want to pay using a method that offers more transparency, objectivity, and certainty. Nearly half don't feel they're being charged fairly.
• Advisors aren't reaching younger demographics: According to Fidelity's RIA benchmarking study, less than 26% of RIA clients are under 50, and those clients represent less than 16% of total assets.

The takeaway from Ron’s findings isn't that advisors should abandon AUM fees entirely. It's that the right pricing model for you should be a deliberate choice based on the value you deliver.

What is a membership-based financial planning model?

A membership model charges clients a recurring fee (typically monthly or annually) for ongoing financial planning services. It separates the planning fee from investment management, making the cost of advice visible and predictable.

This model doesn't replace investment management. About 75% of Lifeworks members also move assets to the firm, where they pay basis points for portfolio management. Clients are able to clearly see the value with this combination of membership + AUM.

How do you determine the right price for financial planning services?

Bullis walked through a straightforward framework that any advisor or firm can apply. It starts with four steps he calls the "4 Ps": People, Problems, Product, and Price.

1. People: Define your ideal client. Who do you bring the most value to, and who do you enjoy working with the most? The more specific the answer, the stronger your positioning. Bullis cited advice from Ric Edelman, financial services educator and co-founder of Edelman Financial: If your father was a plumber and you grew up in the plumbing business, you could build an entire RIA serving only plumbers. If just 1% of the millions of plumbers in the U.S. became your client, you'd have one of the largest RIAs in the country.
2. Problems: Identify clients’ biggest challenges. What are the most complex financial issues your ideal client faces today and will face in the next three to five years? For many next-generation wealth creators, these include RSUs, stock options, tax optimization, and benefits complexity, not necessarily portfolio selection.

3. Product: Productize your services. Many advisors describe what they do in generic terms such as "financial planning," "retirement planning," and "tax planning." Bullis recommends naming your service offering, defining standard deliverables for each component, and branding those deliverables to your firm.

   At Lifeworks, the offering is called the Life-Driven Planning System. It includes eight core service areas: family strategy, financial planning, taxes, risk management, family savings and investment strategy, business and private equity planning, philanthropy, and estate and legacy planning. Each area has defined deliverables, templates, and standards of excellence.

4. Price: Calculate your unit economics. This is where most advisors skip a step. Before setting a fee, you need to know what it costs to deliver your services to one client.

   List each role involved in serving the client including lead advisor, associate advisor, tax planner, estate planner, etc. and estimate the hours each role spends per client per year. Then calculate the cost per client using industry-standard compensation benchmarks. Without taking the time to measure against these benchmarks, you risk leaving your own impact unrecognized and therefore undercharging clients as a result.

How do you calculate a minimum fee for financial planning?

Once you know your cost of services, the minimum fee formula is:

Minimum fee = cost of services / (1 - target profit margin)

Bullis recommends these target financial ratios:

Using an example of $2,300 per client per year being the total cost of services: $2,300 / 0.70 = approximately $3,286 as a minimum fee before any allocation for operating expenses.

If your net profit margin is consistently above 40%, Bullis suggests you may be underpaying yourself or under-investing in the business. Advisors who report 70% margins often reveal they're compensating themselves well below what it would cost to hire someone to do the same work, which could create problems when it's time to scale or sell the practice.

What makes a good financial advisor fee structure?

Bullis outlined four pricing guidelines that Lifeworks follows and that he teaches to advisors in the Future of Advice Academy:

• Simple: Prospects should understand your pricing instantly, without a calculator. Tiered fee schedules add friction to the buying decision. The simpler your pricing, the faster prospects can evaluate whether you're the right fit.
• Transparent: Publish your fees on your website. Consumers expect to know what something costs before they commit. Advisors who withhold pricing risk losing prospects who simply move on to the next option.
• Fair: If you don't believe the value you provide exceeds the fee you charge, you'll hesitate during prospect conversations, offer unnecessary discounts, and undermine your own growth. As Bullis put it, the belief an advisor has in the value of their work is one of the core determinants of whether they succeed at bringing in new clients.
• Enforced with a minimum: Industry benchmarking studies consistently show that firms and advisors who set a minimum fee and hold to it are more profitable and more productive. A minimum fee also acts as a natural filter. The right clients for you will see the value and move forward while the rest self-select out before consuming disproportionate time and attention.

Should you move existing clients to a new pricing model?

Ron's advice here was cautious: don't rush it.

If a client is on an AUM-based fee model and their total cost wouldn't meaningfully change under a new structure, there's little upside and real relationship risk in switching them just for the sake of consistency.

Instead, start with a value statement. At the end of each year, show clients how their fee breaks down across the services you provided across financial planning, tax planning, estate planning, and investment management. This builds awareness of the full scope of your work (for both you and your client) and lays the groundwork for future pricing conversations.

For new clients, lead with the new model from day one. Over time, the composition of your book will naturally shift.

If you do need to adjust fees for existing clients because you're undercharging relative to the work being done, Ron recommends being direct about the reason: the cost of delivering high-quality advice has increased, and the adjustment is necessary to maintain the standard of service they expect.

How much time does a membership-based advisor spend per client?

This will vary by firm. At Lifeworks, each client receives a minimum of four strategy meetings per year, one per quarter. Each meeting runs about one hour, with an additional hour of prep and one hour of follow-up. That's roughly 12 hours per year of advisor-facing time, regardless of whether the client has assets under management with the firm, with additional time from support staff.

Why does this matter now for financial advisors?

If you're an advisor that's planning on being in business in the 2030s, I believe you have to build a strategy today to start winning younger and younger clients. We can't wait to try and figure out how to win that client 10 years from now. It's going to be too late. We have to build a system that's going to win them today.

The window of opportunity is significant. Millennials, now the largest generation, currently hold only about one-eighth of all U.S. wealth. That will change dramatically over the next decade as this generation enters its peak earning years and begins inheriting assets from baby boomers.

At the same time, 80% of wealth management clients say they would like more personalized financial planning, but half are remaining on the sidelines. And the next generation of wealth creators isn't looking for someone to simply put them in a model portfolio, they're looking for help navigating complexity and key life events.

Advisors who build a pricing model that's clear, fair, and aligned with the value they deliver are well positioned to win these clients now and grow with them over the decades ahead. In the end, the choice is up to you.

This post is based on a March 2026 RightCapital webinar featuring Ron Bullis, co-founder and CEO of Lifeworks Financial Planning and the Future of Advice Academy.

RightCapital is the financial planning platform Lifeworks selected after evaluating all major options, chosen for its cash flow-based planning system, modern interface, and rapid feature development. See how RightCapital can support your planning practice: