actually the 3 models are equally good for an adviser to employ. Really some clients do not like model 3, because they have to pay a fee. A lot of misconception here though.

but i have to correct you though, model 2 alone is not the best way to go either. a combination of 1 & 2 is probably the best way to help a adviser earn and yet takes care of the interest of clients without them forking out a advisory fee charge.

for model 2 you basically earn when the clients keep the AUM with you for a period of time. other than that if they take it out, you are also stuck with a no $$$ situation. assuming that the sales charge is negligible in this situation. sales charge model is a model 1 concept.

think model 2 still the most ideal for FAs staying for the long term. Residual passive income for the long run when the funds are kept in place. Model 3 perhaps are for investment bankers sort.

the thing is that income will fluctuate according to market cycles. Funds managed are typically lower during recessions too. FAs will face a “recessionary” period as well.