AI Pressures Advisor Fees as 1% Asset Charges Face 0.3%-0.5% Cost Reality
Updated
Updated · The Globe and Mail · Jul 15
AI Pressures Advisor Fees as 1% Asset Charges Face 0.3%-0.5% Cost Reality
2 articles · Updated · The Globe and Mail · Jul 15
Summary
Financial advisors are facing faster fee pressure as AI gives clients another free source of guidance and raises expectations that more efficient practices should cost less.
One traditional 1% assets-under-management fee now sits against portfolio-management costs that Sybil Verch says AI has helped shrink to roughly 0.3% to 0.5%.
Advisors are responding by stressing services AI cannot easily commodify—financial planning, behavioural coaching, family dynamics, implementation and access to expert networks—and by spending more client-facing time.
Fee models may gradually shift toward flat planning fees, monthly memberships or hourly advice, even as firms still struggle to unbundle services and clearly price each component.
The pressure builds on an industry pivot already under way: a 2024 Leger poll found only about one-third of Canadians would trust AI for financial or legal guidance, suggesting human advice still retains value if firms explain it better.