"Follow the Money": Why Financial Advice Is Failing the People Who Need It Most
In America, the wealth gap is real — and it’s growing. The data is clear: women and people of color continue to own significantly less wealth. There are many variables that drive this disparity. One of the most overlooked — and most fixable — is how financial advice is delivered.
The financial services industry, particularly investment advisory firms, claims to help people build wealth. But the truth is, it’s structured to serve the already wealthy. And that’s not a bug — it’s a feature of the system.
A Model That Rewards Exclusion
Most financial advisors are paid a percentage of the money they manage. This is known as an investment advisory fee, and it’s directly tied to an advisor’s assets under management (AUM). There’s nothing inherently wrong with this model. In fact, when used appropriately, it can be in the best interest of clients. If someone is managing your money and being compensated based on its value, they have a vested interest in helping it grow. That alignment can reduce certain conflicts of interest and provide meaningful value.
Unfortunately, the model only works if you already have money.
Imagine you’re an advisor who charges 1.25% annually. Who would you rather work with — someone with $500,000 to invest, or someone with $1,000? The math speaks for itself.
To be clear, advisors deserve to be compensated. They have businesses to run and bring real expertise to the table. But when compensation is tied to wealth, access to advice becomes limited. It stops being just a business decision and starts becoming a social issue. And I didn’t choose $500,000 randomly — it’s a common investment minimum. That threshold alone excludes the vast majority of the population.
Why Don’t Advisors Just Change the Model?
There are only two other ways advisors can get paid: commissions or flat-fee/hourly billing.
Commissions, like AUM fees, also depend on client assets — they’re a percentage of a transaction. But because they can create conflicts of interest, many advisors avoid them.
That leaves hourly or project-based billing. This model doesn’t depend on how much money a client has. It lowers the barrier to entry and opens the door to a much broader group of people. And yet, despite its potential, it hasn’t taken off. As of 2024, 72% of advisor revenue still comes from AUM fees, and that number is expected to climb to 76% by 2026.
Why? Follow the money.
A System That Doesn’t Want to Change
Even as independent business owners, financial advisors have very little say in how the system actually works. Most operate under the umbrella of a larger organization that provides the tools and infrastructure they need to run their practice. These organizations — known in the industry as broker-dealers, corporate RIAs, or hybrid platforms — set the rules. That includes what technology advisors can use.
These entities play an important role in keeping the system secure, compliant, and functional. They also collect AUM fees with extraordinary efficiency. A client signs once, and fees are deducted automatically — with minimal follow up additional steps, or friction.
Hourly billing is a different story. It requires generating invoices, sending them, tracking payments, and following up — tasks that are routinely automated in virtually every other industry through a wide range of invoicing tools. NerdWallet, for example, maintains a list of the best invoicing software for small businesses, featuring platforms that offer automation, integration, and intuitive user experiences. None of them are approved for use in the financial advisory world.
This isn’t just theoretical. At Aspasia, like many other practices, we are affiliated with a broker-dealer and RIA platform under which we operate. They make the rules (This essay had to be approved by them before release.)
Our platform, one of the largest organizations of its kind and widely regarded as a technology leader in the industry, currently approves a single technology solution for hourly billing. While the platform functions and certainly is better than nothing, it lacks the automation, flexibility, and user experience found in nearly every modern invoicing tool in the broader market. In fact, it is not used outside the financial advisory space, and within the industry, it stands alone.
The Case for Access-Driven Reform
A decade ago, many industries were still built around outdated systems — hard to access, expensive to use, and slow to adapt. Then came a shift: serious investment in infrastructure.
Take healthcare. Tools like digital scheduling, virtual visits, and patient portals didn’t just make care more convenient — they made it more accessible. For the first time, millions of people could engage with their health in real time, on their own terms.
This wasn’t about reinventing the service — it was about removing the barriers around it. If the healthcare industry — with all its complexity, regulation, and deeply entrenched problems — can pull this off, surely financial services can too.
So here’s the question: if healthcare could modernize to meet people where they are, why hasn’t financial advice done the same?
Too often, it’s still delivered through legacy systems built for firms, not for people. But it doesn’t have to stay that way.
Source: Office of the National Coordinator for Health IT — 2022 Data Brief (PDF)
What Needs to Change
This isn’t just a critique — it’s a call for reform. If we want financial advice to be truly accessible, we need to invest in the infrastructure to support it. Other industries have shown what’s possible: safe, reliable, easy-to-use platforms that make scheduling, onboarding, and communication seamless for everyone — not just those with wealth or connections.
Here’s what practical change looks like:
Broker-dealers/RIA must modernize their tech stack. Scheduling, intake, communication, and billing should be as smooth as booking a medical appointment or ordering a ride. The tools exist — they just need to be made accessible and compliant within advisor platforms.
Flat-fee and hourly billing must be easy to implement and scale. AUM fees are automated and turnkey. Hourly billing is still manual, fragmented, and often unsupported. That imbalance determines who gets served.
Consumer choices matter. Just like consumer demand helped drive ESG (environment, social, governance) investing, it can also shift how advice is delivered. When people choose planners who offer flat fees or hourly options — even for small sessions — they send a powerful signal to the market. Every dollar spent is a vote for a more equitable system.
Follow the Money
If you want to understand why financial advice hasn’t evolved, follow the money. AUM fees are automatic, profitable, and easy to scale. Hourly or flat-fee advice? It’s harder to bill, harder to support, and often restricted by compliance systems never designed for it.
That’s not just a business challenge — it’s a structural failure. But it doesn’t have to stay that way. Other industries have proven that when we invest in access, outcomes improve. The same can happen here.
Aspasia Wealth Is Already Building That Future. We’re rethinking how advice is delivered — with flexibility at the core. The model adapts to the client, not the other way around.
We don’t require portfolio transfers. We don’t set asset minimums. We don’t push products. What we do offer is clear advice, modern tools, transparent cost structure, and an experience built around access — not exclusion.
Our belief is simple: financial advice should be available to more people, not just more money.
The industry can — and must — follow suit. Because the wealth gap isn’t just the result of bad policy or bad luck. It’s the predictable outcome of a system built to serve the few — not the many. That’s not just unfair. It’s fixable.