Half of Cetera’s advisor force is currently doing fee-based business, and the firm would like to increase that. The firm recently launched a consulting program to help its advisors transition more of their business to fees. Cetera has targeted more than 600 advisors that the firm believes would be a good fit for the program, called “Make Your Move,” and so far about 160 have committed to it.

“There’s a lot of really high quality advisors that have been operating in a commission world and providing a lot of services to their clients that they may not have necessarily been charging them for, and I think when they initially think about making this shift, that conversation can be intimidating,” said Allison Couch, Cetera’s national sales manager.

Many broker/dealers are looking to increase their advisory business as a way to improve margins. Wedbush Securities, which just recently debuted its new wealth management platform, said about 12 percent of its revenue currently comes from fees. But the firm believes fee-based business is an opportunity for growth, said Wes Long, executive vice president and head of the private client services group. It’s rare to find recruits that don’t have a wealth management practice, he said.

A firm can get 40 to 50 percent better margins on advisory business, said Steve Dunlap, executive vice president of wealth management at Cetera, during a panel session at the Financial Services Institute’s OneVoice 2014 conference in January. In addition, converting more assets to advisory increases the value of the advisor’s book of business.

A fee-based relationship also provides advisors with more flexible investment options, such as being able to move between fund families, Couch said.

“The fact is there are certain things you cannot do on the commission side of the bench that you can do on the fee-based side when it comes to asset management,” she added.

But for many advisors, change is uncomfortable, and many fear that if they talk to clients about adding a new service or changing an investment solution, clients will question why it wasn’t done before, Couch said.

“Most of the time, the fear is the advisor’s,” she said. “We find that once advisors have the conversations with the clients, the clients never even blink.”

Cetera had a fee-based consulting program in place previously, but it involved one-off conversations with advisors. The firm needed something scalable. Along with a team, Shannon Vincent, vice president of wealth management marketing, created a modular program for advisors who would commit to a consulting relationship.

Most advisors who signed on are in the first step of the program, “Build Your Plan,” which helps advisors segment their current book of business and identify who would be right for a fee-based relationship. On the asset management side, advisors should look at the client’s level of sophistication and assets, Couch said. There is no minimum asset level for clients who just want financial planning.

As an advisor makes the switch to fees, they also take on a fiduciary relationship with the client, one that requires ongoing communication and the client’s willingness to be forthcoming, Couch added.

During the second step of the program, “Make It Happen,” advisors start to determine what advisory programs would make sense for their clients. Cetera’s wealth management platform includes advisor-directed and turnkey programs. The module takes advisors through how to price their advisory services, how to explain what they’re doing differently and how they’re structuring the fees to clients.

The third step is engaging with clients.

“Now that many of these relationships are going to be shifting from a brokerage approach to an advisory, and oftentimes financial planning approach, we’re going to be working with the advisors to understand how to have effective client reviews, how to set expectations, set agendas for the reviews, use new technology that Cetera’s coming out with, as well as how to incorporate the financial plan back into the ongoing client review process,” Vincent said.