Dan Mahoney, a financial planner and president of True Square Financial in Atlanta, recently switched his business payment model from fee-based to subscription-based -- and he's not looking back.

"After 15 years in financial services, I believe that asset-based fees create an inappropriate incentive for financial advisors and investment managers to spend their time and effort gathering assets rather than helping clients," Mahoney says. "I've worked with dozens of Wall Street firms and found they all had a sales-oriented culture that valued revenue growth over client outcomes."

Mahoney says the most admired and rewarded professionals on Wall Street are the rainmakers who bring in the assets - and that's a structural problem for advisors. "A careful steward who tries to minimize clients' costs should not expect a big year-end bonus," he says. "But a subscription-based model ensures that financial advisors focus on delivering ongoing value to clients to earn their fee."

Now, Mahoney says his firm's standard fee is $250 per month for comprehensive financial planning services and $500 per month for comprehensive financial planning combined with investment management.

That line of thought constitutes a game-changer for the money management industry. "After all, it's a poorly-kept secret in the industry that managing a $5 million investment portfolio is not much harder than managing a $500,000 portfolio," Mahoney notes. "A subscription-based model levels the playing field by ensuring that all families can get expert advice at a reasonable cost. Why should a client's fee increase automatically as their investments grow?"

Why, indeed? It's a question many other financial advisory firms are addressing, as well.

"Subscription fees benefit everyone," says Larry Miles, principal at AdvicePeriod in Los Angeles. "We use them for clients of all shapes and sizes. From what we're seeing, clients benefit from increased transparency and a reduction of conflicts."

Miles says asset-based fee models have inherent conflicts of interest. "The advisor is financially motivated to retain as many client assets as possible - even if that's not in the client's best interest," he notes. "For example, what happens when it's in the client's best interest to use some of their assets to buy a new home or pay down debt? If the fee-based advisor recommends spending assets, they are essentially taking a pay cut. That's a tough position for advisors to be in."

Using a subscription-based business model, advisors benefit from a more predictable revenue stream. "That helps them run a better business - one that should ultimately benefit clients," Miles says.

Subscription or "retainer" based fees are no trend, other industry professionals say. In fact, "they will eventually become the industry standard," says Steven Fox, founder of Next Gen Financial Planning in San Diego.

"This is exactly what I do in my firm," Fox says. "I have a simple subscription model where clients pay a flat fee for both financial planning and investment management services." Fox says he likes the subscription platform, because it's easy for clients to understand, he has predictable and stable revenue, and it removes the inherent conflicts of interest in the traditional assets under management model. "Rather than following the typical model of charging for investment management and providing financial planning for free, I'm doing just the opposite," he says.

So far, Fox says he's come across two disadvantages to the subscription payment model. "First, I'm underpaid for the significant amount of work I do upfront with a new client," he says. "Second, sometimes clients expect some kind of deliverable each month if they're paying each month. However, both of these challenges can be overcome and I haven't yet had any clients drop off of the monthly subscription."

Some financial advisors are using subscription-based payment models as a recruiting tool for the next generation of wealth - the Millennials, who tend to like the "pay as you go" approach.

"My firm has actually begun the process of rolling out a subscription model for our clients," states Lucas Casarez, a wealth advisor at Keystone Financial Services, in Fort Collins, Colo.

Casarez says most of the new clients he works with have never worked with an advisor before and thus have very little understanding of the various cost structures. "Consequently, we've been able to leverage this new model to ensure that we don't ever have to turn clients away because of asset size any longer," he states. "This will be even more impactful as we begin to market to younger clients, who typically would not have sufficient assets to work with an advisor."

There's a growing amount of evidence in the advisory sector that subscription-based payments are an idea whose time has come.

Once clients get used to the idea, and start demanding subscription pricing, money management firms could be hard-pressed to continue with the fee-based, assets under management model, as they "flee the fee."

Editors' pick: Originally published June 2.