The debate rages about who would get hurt if commissions suddenly went the way of the dodo bird in Canada.

When the UK banned commissions in January, about 20% of advisors left the business. Such articles discussing the demise of fees have incited heated comments.

Read: Fee-for-advice model lacks transparency: IFIC

Many of the negative reactions, I suspect, are from advisors who’ve never successfully offered a fee-for-service option. One advisor said he offers a fee option, but no client has ever chosen it. I suspect that practice isn’t really set up to accept fees. Rather, the advisors are presenting the option to give clients a sense of the value they’ll receive by working with that firm.

Read: How to frame fees

With such objections in mind, I want to address two challenges.

1. Lack of confidence in the minds of advisors

If you’ve never successfully, over a long period, charged fees for advice, you can’t know what it would be like. I agree; the thought of such extreme change uncovers a lack of confidence in many. And no wonder advisors feel that way. No one has ever trained them to sell fees.

(And for those of you who think the fee-for-advice model will get you away from sales, think again.)

Read: Worry about value, not fees

I successfully operated a fee-for-advice model for years. And I’ve trained many advisors with various firms and licensing types to charge fees. The number one issue is entirely between the advisor’s own ears, and the solution is a mindset shift. A successful fee-for-service advisor knows exactly what she’s worth.

2. Some consumers not having the cash flow available to pay for advice

UK firms are offering payment plans, and some clients are paying with credit cards. Advisors reasonably object to the idea of clients going in to debt to pay for advice.

Read: Are your fees transparent?

But here’s the thing: if you offered cash-flow planning, you’d know what the client could afford in the first place.

Never mind that some advisors already unknowingly put many of their clients in debt to pay for advice now. When advisors don’t create cash-flow plans and their clients overspend, they’re contributing to that debt by encouraging clients to pay for insurance premiums or make investment contributions.

Read: Wealthy clients add fee accounts

The bottom line

To all those who say, “But what about the little guy?” Guess what: the little guy who has no cash flow will never be your client. Clients with no cash flow don’t buy financial products. Without a cash-flow plan, your clients can’t pay for advice. But with one, most of your clients will be able to afford you, and will end up financially ahead for it.

What do you think? Sound off in the comments or email us.

Stephanie Holmes-Winton is a Halifax based financial services educator/speaker who helps advisors find the money to help their clients fund their financial plans. She is the author of Defusing The Debt Bomb & $pent. Stephanie is also the founder and board chair of the Certified Cash Flow Specialist™ designation program. You can reach Stephanie at or
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The lions share of mutual fund assets are held by the big banks. No matter what happens with 81-407, bank employees’ salary and bonus will continue to be paid from MERs. But it’s not a commission.

After 20+ years in the business, I have the LUXURY to do fee-only. When I started in the business, I had the NECESSITY of doing DSC to survive.

The result of 81-407 will probably be to eliminate new entrants to the “independent” side of the business, and increase bank market share to almost 100% over the long term. Is this what CSA wants? Consumers having no choice but the banks?

Monday, Jun 24, 2013 at 2:04 pm Reply


Why not offer specialties? One professional could specialize in planning and another in products. I offer fee-for-advice financial coaching & planning. If there is a need for a financial product, I simply refer the client to a trusted professional (no referral fee accepted).
My fee is up-front or renewable directly quoted to the client.

Many consumers appreciate this service model. It’s not a replacement to commissions – it’s a choice. An empowered consumer will make good personal and business decisions.

Saturday, Jun 22, 2013 at 8:28 am Reply


Wow! Thanks for all the amazing comments and the time to make them even if you don’t agree with me!
Thank you Carey that was the point of this piece. This is inevitable and we do need to discuss it.
That said a few things to clear up: Zig When I say fee-for-advice I mean fee-for-advice! Not a fee tied in to a fund, not a fee charged from a client account as a percentage of assets. I mean someone comes to you for “financial advice” and pays for your time, planning or specific expertise. So just to clear that up if you or your firm offer F-series that is NOT what I mean when I say fee-for-advice. I would call that Fee based. And as you can see I said fee-for-advice “option.” I DO NOT AGREE WITH BANNING COMMISSIONS. I do believe there should be fee-for-advice options offered by most advisors in Canada. That is my belief and it doesn’t make your value as a commission based advisor any less. In fact having a wide spread fee-for-advice option would take the commission ban talk right out of the mix. Why ban something when there are clear and easy (if we made them clear and easy) to understand options which have both pros and cons?
Chad can you share with me where you go the stat showing 80-90% of Canadians cannot pay a fee-for-advice? Can you post a link I haven’t seen it. Is this what you discovered in your own practice while instituting and testing over a few years a viable fee-for-advice option in with many of your own clients?
I have worked with many “regular” Canadians who are not rich by any means and were perfectly capable, by their own choice (and I think it is SO KEY they get a choice and are not FORCED to pay fees for advice), of paying a fee. I actually had a policy that if I couldn’t find you far more money doing the plan, than the cost I wouldn’t take the case. Now I didn’t offer credit counselling or volunteer work so yes I needed to take on clients who have incomes. My speciality was clients who were within 10 years of retirement who had some asset and over 200k in debt. If you look at the stats you’ll see that’s pretty “regular” And Chad helping them figure out cash flow is just what I did so that new doctor with debt I could help right away and I’ve trained many advisors who do just that. I didn’t need to only help them by having commission as an option. They still needed to buy their products from someone, that person got a commission, which was totally fine. I offered a service which that commissioned advisor did not, which the client needed, so it worked great!
My point here is that we need to accept that fee-for-advice could and should be an OPTION, just an option, never the only choice. And Zig is right just like commissions-only would be bad, fee-only would also be bad.
Andre I don’t where you read any wording in my piece where I made “the suggestion that the fee for service option is the only option that ensures the investors receive unbias advice from their advisor?” I didn’t say that at all. I wonder if you are referring to the hyper link piece written by Rob Carrick which we linked to give a sense of the debate brewing and what the public is hearing? Rest assured I don’t believe that fee-only will change the quality of investment advice. I agree with your Andre the clients right to choose shouldn’t be wiped out…but the choices could maybe use some enhancements.

What was really the point of this piece is that some of the reasons for industry back lash against the idea of a fee-for-advice option should be examined. It’s not that it’s a blanket solution of any kind.

Thanks again everyone. I’ll be checking in and feeding back on any further comments. I also welcome direct communication if you’d like to email me you’ll find it in the byline below the piece. I am not your enemy. I simply want to see both the industry and the public financially thrive and I don’t believe we can do that if we don’t have both commission and fee-for-advice options.

Friday, Jun 21, 2013 at 5:50 pm Reply


This kind of discussion and the inevitable trend of transparency is a very healthy and good one. As long as a method of compensation and it’s costs disclosed we have reached the objective which was full transparency in the first place. For a regulator to determine a choice of compensation in a market is in my mind, anti-market and will be detrimental as all initiatives that try to fight the efficiencies of a true market of products and services.

Friday, Jun 21, 2013 at 4:35 pm Reply

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