The Client-centred Blog

A new way of thinking about financial planning fees  

Although there seems to be plenty of information on the process of increasing your financial planning fees, there is far less on the thinking behind it.

So, in this article I am taking an alternative look at fee charging.

Read on to discover: 

1. How most firms set fees.

2. A different way of thinking about fees.

3. What clients pay for.

How most financial planning firms set fees

Most firms seem to set their fees by looking at what other firms they perceive as similar to them are charging.

Some firms then charge less because they want to offer value for money. Others charge a very similar amount because it seems to be the going rate. And others charge more because they believe they offer a premium service.

So far, so good.

But the problem with comparing yourself to others is that it comes from a mindset of believing what you are offering is a commodity. If you think like this you are giving yourself very little room for manoeuvre. 

Fortunately, it is entirely possible to approach fee charging in a whole new way.

What are you charging a fee for?

In the ‘Client-centred financial adviser’ book I wrote:

‘The problem that many practitioners and firms create for themselves is completely misunderstanding what they can actually charge for. The vast majority of the profession thinks it is charging for services and by doing this it is reducing what they do to the status of a commodity and inviting comparison. For example, by working on the level of providing products or solving financial problems then it is unavoidably offering a service which, no matter how good, can only attract a certain fee.’

Going back several years a coach I worked with helped me better understand fee charging. He helped me realise two particularly important things:

1. Most professional people will only give potential clients a relatively small amount of time before they expect to be paid.

2. Most professional people are very quick to diagnose a client’s problems and then jump in with a solution.

Although these points can seem to make sense they are also what confine people to charging some variation on ‘the going rate’.

So, it also presents an opportunity to be different from the majority. But where can you begin?

It does not begin with what you do; it begins with who you are being

Michael E. Gerber wrote a best-selling book called, ‘The E Myth revisited‘. It is a book about how to be successful in a small business and he very astutely wrote:

The work we do is a reflection of who we are. If we’re sloppy at it, it’s because we’re sloppy inside. If we’re late at it, it’s because we’re late inside. If we’re bored by it, it’s because we’re bored inside, with ourselves, not with the work. The most menial work can be a piece of art when done by an artist. So the job here is not outside of ourselves, but inside of ourselves. How we do our work becomes a mirror of how we are inside.

So, the work you do with your clients, the value you create, and the fee you charge are, first and foremost, a reflection of who you are being. 

Who would you need to be to…? 

*Go really deep on understanding your client and what makes them tick.

*Listen to someone like they have never been listened to before. 

*See new possibilities for your client where they don’t.

*Inspire your clients to play a bigger and better game of life.

*Have your clients be willing to confront their fears, worries, and concerns.

*Allow yourself to be very quiet on the inside and follow your intuition.

*Confidently ask for the fee you want and have people willingly pay you.

All of these have the potential to hugely increase the perception of value and yet they are often neglected by advisers.

Limitation creates value

A truth is that the fewer people that can do something, the more it becomes worth. 

If I want a financial product or to invest some money, there are thousands of advisers that can do that for me. Yet very few financial planners create a powerful, potentially life-changing experience with their clients. 

What people are really paying for is the degree of difference you can make in their lives.

So, rather than thinking about what you do as a commodity, how can you deliver what you do in a unique way that creates massive value for your client and is incomparable?

If you want to increase your fees this is the starting point. 

P.S. You may want to take a look at ‘How to successfully sell financial planning’. Click here.

Facebook
Twitter
LinkedIn

Leave a Comment

Related articles

Are your feelings running your business?
Have you ever found that self-doubt, a low mood, or feeling fearful has held you back?  I'm sure this has been the case for all of us and it can have a big impact upon the quality of our results. In this article I am sharing how you get past those feelings and into taking action - the only thing that produces results.
Stress free goal setting for financial planners
What is your experience of goal setting? For me, I would set goals because it seemed like a good idea to know where I wanted to get to. Yet I found that, at times, the process could often become quite stressful. I have also heard many people share that this is experience too. So, if stress free goal setting is something that would be valuable to you, please read on.
The value of knowing your value
Last week I was in London for three days attending the AJC Coaching Career School. This is a six-month long school, run by Ankush Jain, for coaches who want to build a more impactful coaching practice. For me, one of the most important things about being in business is that it feels fresh, inspiring, and as exciting as it did in the beginning.
Why elevator pitches don't work
What prompted me to write this article about elevator pitches was reading an article published by Asana. It said: "A good elevator pitch can be the difference between landing your next big opportunity or falling short of the competition." Really? Does this stack up?
Be the casino, not the gambler
Are you happy in your job as a financial planner or adviser? I often speak with financial planners or advisers who feel stuck in a rut and want to reinvigorate their work.  Maybe they have been doing the same thing for a long while and simply want to change. Sometimes they want to do things differently but experience some doubt. Sometimes it is they find a certain aspect of their job unrewarding.   So, how do you begin to turn this around?
My favourite Einstein quote and why it matters
One of the biggest challenges for a financial adviser is getting stuck on a plateau they cannot seem to move past. Can you think of a recurring problem or limitation in your business?
Two approaches to goal setting and why only one is healthy
I have found that goal setting can be a double-edged sword.  On one hand we want to achieve things that are important to us, so aiming at something makes sense. Yet for many people pushing hard towards their goals also causes them a lot of stress and compromises their quality of life.
Is money holding you back from building a prosperous financial planning practice?
I read a survey conducted with financial advisers asking what their biggest challenge was. Number one was getting clients. It would be easy to believe that all is required to solve this problem is finding a reliable source of potential clients. Yet this is not always true. As I discovered, we sometimes have an 'upper-limit' issue that slows us down.
Wisdom from one of the UK's most successful female financial planners
My client Fulva Giust is one of the UK's most successful female financial planners, operating for over thirty years.  Fulva has built a thriving practice serving wealthy families and individuals built upon rock solid foundations of trust, caring, and kindness. She takes a deep interest in the lives of her clients, what they want to accomplish and their relationship with money.
10 powerful ways a financial planner can deeply serve clients from the first moment
How can you begin to deeply serve a client from the very first moment? When meeting with a potential client there are likely to be at least three important questions on their mind: 1. Do I like them? 2. Can I trust them? 3. Can they help me?
Do you hate selling financial planning? Discover the two shifts that change everything
Do you love working with your existing clients but hate selling? If so, you would not be alone. Yet rather than enduring this essential aspect of being a financial planner what if you could learn to love what is often perceived as the hard part? If this is you then read on to discover two shifts that can change everything.
The 12 Client-centred mind shifts - part 3
Have you ever considered what creates the very highest value for your financial planning clients? I am going to suggest it is not, important as they are, the financial arrangements you recommend and put in place for them. No. It is their own mind shifts.
The 7 secrets of thriving in a long-term financial planning career
It seems to me that many people lose their passion for what they do, especially if they have done it for a long time. So, what are the secrets of thriving in a long-term financial planning career?
The hidden secret of where you find financial planning clients
Do you want to know the hidden secret of where you find financial planning clients? Most of the advice on how to find financial planning clients is prescriptive. It tells you what to do or where to look. Yet how helpful is this?
What are the three roles of a lifestyle financial planner?
Do you ever find your role as a lifestyle financial planner being overly complex? Would you like it to be simpler, more productive, and more rewarding? If so, this article considers that there are only three core roles of a lifestyle financial planner.
10 career boosting books for financial planners
Why do people's careers stall, stagnate, become mundane, fall short of expectations, and, ultimately, lack the rewards they want? In my experience it is rarely lack of...
Your financial planning fees - why they must NEVER be an issue
This article explores why your financial planning fees must never be an issue with clients. Just recently a financial planner client of mine came to our coaching session wanting to talk about a fee situation with a client of his.
The three types of financial planning client
There are three types of financial planning client you can build your practice around. And because the three types are defined by what the client values, it can make a massive difference to the quality of your business.
Financial Planning clients for life - the one thing you MUST do
Creating happy, enthusiastic, loyal financial planning clients for life requires you to do one thing well, and consistently. What is that one thing?
How to get financial planning clients - the only way I know
Financial planning is not a commodity. It is experiential and conversations are right at the core of this.
The best prospecting advice for financial planners
Why do some financial planners seem to effortlessly find clients whilst others experience growing their practice as a constant struggle?
What does it really take to 10x grow a financial planning business?
There is a critical factor in growing your financial planning business that is often misunderstood.
Can coaching for financial planners really help your career?
Why are an increasing number of financial planners choosing to work with a coach? Is it something that could help you accomplish your most important goals and realise more of your potential as a financial planner? Read on to discover why coaching works...
Financial planning relationships - how to add massive long-term value
No matter how long you have known your client what is the secret to continuing to add massive value? Imagine when you first meet a new client and the early period of your relationship. In the beginning...