Investors Increasingly Willing to Pay for Financial Advice: Cerulli

National banking firms have struggled to successfully attract these investors with a service-plus-product approach because incentive structures sometimes undermine the firm's fiduciary duty to clients, or because competition between divisions within the firm sometimes prevent them from serving the client's needs.

Firms that can successfully offer comprehensive planning with financial products have "the potential to fundamentally reshape the wealth management model," according to Cerulli. "Investors are interested in comprehensive advice, and are open to using a single provider, but remain hesitant to fully engage with providers due to concerns about firms' dedication to putting investors' interests ahead of short-term firm profitability."

In addition to being more willing to pay for financial advice, the study found that investors have become more knowledgeable about how to pay for it over the past few years. However, a great number of investors are still under the impression that investment advice is free or they're not sure how they pay for it. In the second quarter of 2016, Cerulli found, 44% of investors were unclear or misinformed about their advisor's fee structure, although that has fallen from 64% since 2010.

Interestingly, the report found that 44% of investors would prefer to pay for advice through a commission. That finding is driven mostly by self-directed investors. When you take into account all investors who receive some advice from an advisor, Cerulli found "asset-based fees are chosen at least as often as commission options." The type of investor who only reaches out to an advisor when they have a specific need would much rather have a fee-based option than a commission.

As the Department of Labor fiduciary rule and the commoditization of financial advice thanks to robo-advisors have driven an increased focus on fees, some in the industry have suggested retainers and hourly fees as alternatives to commissions and AUM-based fees. However, Cerulli found investors may be resistant to such schemes. Just 7% said they would prefer to pay by the hour for financial advice, and 17% said they would prefer to pay a retainer.

— Read Why Net Worth Pricing Might Be the Future of Wealth Management on ThinkAdvisor.