Service-Based Paid Advisory Is Not for Everyone – How Much Do You Need to Pay for Quality and Premium Service?

In recent years, financial advisory in the Czech Republic has evolved significantly. One growing trend is the concept of paid advisory. Unlike the traditional commission-based model, this approach allows clients to pay their financial advisor directly, independent of the products they arrange. How does this model work, what are its advantages and disadvantages, and how is it received in the Czech market?

Mediation vs. Advisory under Czech Law

Czech legislation distinguishes between two main forms of financial services: Mediation and Advisory.

  • Mediation is a service that helps clients select and arrange financial products. The advisor is remunerated by a commission from the financial institution for arranging the product. This model involves proposing a specific product that the advisor offers and then mediates/arranges for the client. Thanks to the advisor, the client gains an overview of various institutions and products on the market, often including business discounts, and can obtain the product at the same or lower price than if purchased directly from the insurer, bank, or provider.

  • Advisory, on the other hand, does not lead to arranging financial products. The goal is to bring added value to the client, such as a comprehensive financial strategy or plan, administrative assistance, investment reporting, general consultations, or providing an online contract archive. Advisory focuses more on long-term cooperation and comprehensive care for the client’s financial health.

What Is Service-Based Paid Advisory?

This is a model where the client pays for services/consultations directly to the advisor, either through hourly rates or a monthly flat fee. This approach ensures that the advisor is motivated to provide quality and independent advice, as their remuneration is not dependent on selling specific products.

Advantages of Service-Based Payment

  1. Transparency and Professionalism: Clients know exactly how much and for what they are paying. The scope and price of services are contractually defined with the advisor.

  2. Independence of Advice: The advisor has no financial incentive to recommend products unsuitable for the client. The goal is to improve financial literacy, which leads to better financial decisions and the satisfaction of having a personal “financial coach.”

  3. Long-Term Relationship: This model supports long-term cooperation between advisor and client. Many of our advisors serve clients across two generations, helping to build wealth with safe transfers to the next generation, preventing the devaluation of family assets due to poor financial literacy or avoidable mistakes.

Disadvantages and Challenges

  1. Lack of Awareness: Many clients still don’t fully understand what service-based payment entails and may hesitate to use it. While many of us are accustomed to paying for premium services (Netflix, Spotify, YouTube, premium healthcare, podcasts, cloud services), in finance, we still expect free advice. Unfortunately, the quality and level of “free advice” is often poor.

  2. Market and Regulation: Financial advisors must meet certain standards and understand applicable legislation to offer this type of service.

Service-based paid advisory represents a modern and transparent approach to financial advisory. While it may never become the mainstream perception of financial advice, its benefits for both clients and advisors are significant. In the future, we can expect this model to continue growing in popularity.

Stone & Belter offers service-based financial advisory in the form of three packages, differing in the scope of services provided. Our packages include, for example: claims settlement by a professional law firm, general consultations, claims reporting, online financial updates, regularly updated financial strategies, consultations with real estate experts, and an online contract archive. The most affordable package containing these services is priced at 579 CZK (€23.16) per month.

The next-level package also includes a crisis and inheritance plan and comprehensive administrative processing.

These packages are designed to provide clients with maximum administrative support and added value in their financial planning. Packages are billed monthly, making the service more accessible to a wider range of clients.

Your financial advisor will be happy to tell you whether the service-based paid advisory is suitable for you.

Note: Fixed rate used: 1 EUR = 25 CZK.