I am increasingly being asked for help by brokers finding it difficult to move to a fee-based income proposition, with many saying that as soon as they mention fees they lose clients.
The basis of any fee arrangement is that clients believe they are getting value for money and that the advice and choice offered is tailored to their circumstances.
It has to be made clear that the fee is commensurate with the value delivered and this can often be highlighted by doing a cost benefit exercise that will make it easy for clients to see they are getting what they are paying for. Brokers can develop a fee proposition that shows where benefits are derived and savings made.
Don’t forget sales aids can be used for this purpose, but the number one element has to be your ability to sell yourself. Many brokers rely on the commission structure and have not given enough consideration to long-term relationships with customers.
The Retail Distribution Review will demand that fee generators show how their professionalism is a necessity for their clients. Just as we readily pay other professional fees now is the time to show that what advisers offer is worth having.
Convince your clients you have an added value worth and charging fees becomes easy. But to achieve this you need a robust business strategy to attract new clients and generate repeat business.
Often the best advice is to ask somebody who has introduced a fee-based proposition how they did it. Networks and clubs should also be approached for their support.