Reports of the death of the asset-based fee approach in financial advice have been greatly exaggerated, J.R. Robinson writes on Advisor Perspectives.

Alternative fee structures have their own potential conflicts of interest, and investors favor the asset-based fee model even in the face of price competition from lower-cost robo-advisors, writes Robinson, a financial advisor and owner of Financial Planning Hawaii.

It’s true that the asset-based fee model has an inherent conflict, according to Robinson. It’s not in the advisor’s best interest, after all, to give advice that would shrink a client’s assets under management, such as for a down payment or a real estate investment, he writes.

Nevertheless, other ways of charging for financial planning are not conflict-free, according to Robinson.

Advisors who bill by the hour, for example, have an incentive to slow things down, he writes. Hourly billing brings up another conflict inherent in “value-billing” — deciding whether to charge for the same amount of time a task once took an advisor, even when a lot of that work becomes automated and doesn’t require as much time, Robinson adds.

Flat-fee advisors, meanwhile, have an incentive to do as little work as possible, he writes. This means advisors have far less incentive to do the more time-consuming aspects of financial planning for their clients, according to Robinson.

Investors increasingly favor the assets under management fee model as well, he writes.

Clients like the assets under management fee model, he says. They like that advisors get paid more when their portfolio increases in value, for example, according to Robinson. They like fees to be deducted from their accounts rather than billed, he writes. And they like that fees based on assets under management can be tax deductible.

Financial planning fees enjoy no such privilege, according to Robinson.

Finally, while the advice industry is feeling fee pressure from lower-cost robo-advisors, consumers clearly value the ability to speak to an actual human advisor, Robinson writes.

That’s why so many new entries from large players such as Vanguard, Schwab and Betterment are steering toward the hybrid model, according to Robinson. Meanwhile, dedicated financial advisors working on the asset-based fee model are far more likely to delve deeper into the aspects of financial planning outside of investment — far more so than the staff of advisors assigned to help clients on a hybrid platform, he writes.

And for advisors who are concerned about only being able to afford to serve ultra high net worth clients with the asset-based fee model, there’s the tiered structure that charges varying percentages based on the amounts managed, according to Robinson.