A typical North American financial advisor forgoes $20,000 in potential revenue every year because of discounts on fees, according to a study released yesterday by Toronto-based PriceMetrix.

Assets in fee-based accounts grew by 24 per cent between 2007 and 2010, while transactional assets decreased by 1 per cent, according to the firm, which advises brokers on practice management.

The analysis is based on the PriceMetrix aggregated North American database, representing 15,000 advisor books, 2.3 million investors, 380 million transactions, 1 million fee-based accounts, and over $850 billion in investment assets.

Among other findings, the report found that the average return on assets in fee-based accounts in the three years to 2010 fell to 1.32 per cent from 1.47 per cent.

While most retail wealth management firms publish recommended list prices, many have offered discounts on fees and have found it difficult to increase prices once they have been set. Only 5 per cent of firms included raised their prices on existing fee-based accounts by at least 10 basis points between 2007 and 2010.

The study found a wide variation in pricing, with the top quartile charging an average 2.01 per cent and the bottom quartile an average of 0.81 per cent.

The average advisor opens about 15 new fee-based accounts a year, with 32 per cent increasing prices on new fee-based accounts.

Within the firm's data set, it said that assets in fee-based accounts make up almost 25 per cent of total invested assets and 37 per cent of total revenue. More than 60 per cent of advisors now have 5 per cent or more of their assets held in fee-based accounts.