April 11, 2018
Fee ready, how to stay ahead of the curve
If you are worried about how industry, technology, and regulatory change will affect your practice, you are already behind the curve. The key change in the future is consumer behavior change. Going forward in a transparent world, how will you charge for your fees? Notice I did not say fee-based. I don’t mean hourly fees either. Fee ready for the future means a combination of fee-based and fee for advice. How do you get your practice fee ready when you sell commission-based insurance products, investment management and planning such as retirement planning, financial planning, estate planning and more. Advisors have an opportunity to shift from products to advice.
Pricing in a world of change
Some advisors do not get to price their services, the firm does that for them. But it is not about what you charge that is important. This is the most common mistake among financial professionals. It is what the consumer is willing to pay for your services. The consumer dictates the cost.
I had a great discussion about fee readiness with Bill Bachrach (www.billbachrach.com) who has an incredibly successful process to prepare advisors to be fee ready. He asked me an interesting question. When the market is down dramatically, do clients need the advice of their advisor? "yes, of course", I said, "they need the guidance and advice from their trusted advisor". When the advisors income is down dramatically also, does it make sense to for financial advisors to work harder when your income is down dramatically? Is this a win-win scenario? Working twice as hard for the same compensation or less? Pricing your services based on that information will help you become fee ready for the future.
While I talk to advisors about process in their practice, Bill teaches advisors to sell the outcome to clients, not the process. The outcome is what people are willing to pay for. How you illustrate the outcome depends on the client. In your practice are you looking for more ideal clients, more revenue and more lifestyle? What is the outcome you are looking for in your business for you? Once you have a clear vision of what outcome you want, what are you willing to pay for help or advice to get it? Now walk in your client's shoes. What outcome do they want in their business and life? What are they willing to pay for advice to get it? Without giving the whole coaching program away, it is about articulating two things to ideal clients and prospects, what do I get as an ideal client, and what does it cost?
What does fee ready mean? For some financial professionals, it may mean going fee-based. For others, it is fee for service. A third subset of advisors may be doing both, fee for service and fee-based. Regardless of how your business model is set up, what fee readiness means is to show your ideal clients the TOTAL fees they pay for advice and services and create a win-win environment where your clients and you both agree to the total costs in dollar terms, not just percentages( example $10,000 per year fees ) What would you rather pay, $10,000 or 2%? Total fees is dollars and percentages. While insurance business is different in that insurance policies always discuss the cost of annual premiums ( in dollar terms) the commissions are not transparent. On the other hand, the money management and holistic financial planning services and advice can be transparent. In the end, it is important to build a win-win client relationship when it comes to fee readiness.
Looking around the world, the 5 most highly regulated countries from a financial advisor's perspectives are Australia, United Kingdom, South Africa, United States and Canada. What do financial advisors in these countries do to tackle major regulatory changes? Researching practice management from around the world, we found that while some of the concepts around the world are similar, the implementation details and delivery to clients made the difference between an average advisor and top performing advisor. The major regulatory change is not something that advisors can prepare for in a few hours. Depending on your business, there are several details to consider. If you are getting your business fee ready or increasing the value you deliver to ideal clients and prospects, I would start by building project 100.
Have a 1 to 2-year timeframe – Project 100 (you need 100 hours to be properly prepared for fee readiness and deliver more value to ideal high net worth clients and prospects. It will take time, as you may need to have new discussions with all of your ideal clients and prospects. You will need to clearly articulate ( and put in writing) your value promise, which is what ideal clients pay and what they get. (See my articles on fee audits) It is called project 100 because you will need to spend 2-4 hours per week for one year 100+ hours on building processes ( if you do not already have them) The first step is to plan them in your calendar each week 2-4 hours working on your business. How can you increase the value you currently deliver? Start by making a list of what high net worth prospects are NOT getting from their current financial advisor. Plan the time first. Then plan how you are going to find more ideal prospects.
Feedback is critical in the shift to total transparency
It starts with client feedback. Are your top clients willing to pay your fees differently? What are your top clients willing to pay you? Now meet with a new prospect and present your fees. Are they willing to sign up and pay your fees? What do top advisors provide and charge? The toughest part of the journey towards fee ready is finding out some of your top clients are not a win-win relationship. They are not willing to pay your fees for the services you provide. An emotional barrier to getting fee ready. Once you cross this barrier, you are on the road and can look back at the rest of the industry and notice you are ahead of the curve.
To learn more about acquiring more ideal clients, download my "exclusive prospecting checklist" by clicking on the following link.
https://multimedia.getresponse.com/getresponse-BwKsu/documents/655565704.pdf?_ga=2.15668533.2052394453.1523464813-737908435.1523464813 or email me for a copy at email@example.com
If you would like to discuss getting "Fee ready for the future and compelling processes for acquiring more ideal clients and prospects" click on the link below to schedule a 30 minute time to talk https://my.timetrade.com/book/JMTNJ
Envision that you have already accomplished your most important goal for your business today. How does that make you feel? Act as if it has already been done. The message is clear, the best advisors spend more time on servicing clients BECAUSE they have invested the time and energy to put their processes in place.
Advisor Practice Management’s goal is
“ Helping Financial Advisors take action, to create 100 quality financial plans for their clients”. My mission if you choose to accept it is “ To help advisors to create 1 million quality financial plans for people”. Ask your clients and prospects this question " What is the probability of success in reaching all of your goals with your current plans? Let me know if I can help you grow your practice.
Let’s work on your business. Start by emailing us. Why not?
Grant Hicks, CIM, National Director Practice Management
Advisor Practice Management
909-17th Ave SW, 4th Floor
Calgary, Alberta T2T 0A4
Tel 587 390 3148
Cell 403 970 8895
PS Where do you want to be in 3 years?
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