Talking to clients about fees
"Clients really only care about two things: the services that advisers provide and the fees they charge and once they've been provided with these inputs, they will make their own determination as to whether those services hold value," according to US psychologist Dr Jim Grubman.
Grubman, who has been referenced in new research released by State Street's SPDR University, says that given these client attitudes, advisers should hold their fee discussions accordingly.
"Rather than expecting clients to compensate you for the big-picture benefits of helping them reach their goals and lead more secure financial lives, you need to begin your fee discussions by listing the specific line item services you provide and establishing what those services are worth," he said.
Grubman said this approach created "the essential service/fee balance that enables clients to define your value for themselves".
"In fact, viewing the fee discussion from your clients' perspective can help you to more effectively communicate your fees," he said.
"When I ask advisers what they mean by value, they invariably start to list the services they
provide: help with retirement planning, integration of multiple accounts, or management of taxes," he said. "What they don't realise is they can more effectively communicate the value of an advisory relationship by just listing those specific services at the outset of the fee discussion."
Grubman said that talking about the "value I provide" muddled a fee conversations.
"Advisers should discuss the services they deliver, the money they save clients, and the risks they help them avoid," he said.
AUTHOR
Mike Taylor
Recommended for you
The board of Insignia Financial has reached a decision regarding the possible acquisition of the firm by US private equity giant Bain Capital.
Six of the seven listed financial advice licensees have reported positive share price growth in 2024, with AMP and Insignia successfully reversing earlier losses.
There has been a 16.3 per cent rise in the wealth of Australian billionaires this year to over $200 billion, UBS finds, as Australian advisers shift their offerings to meet this expansion and service their unique needs.
AZ NGA is looking to triple in size over the next five years as US investment giant Oaktree completes its $240 million investment in the professional services company.
