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Industry Spotlight > RIAs

If You Do It . . . They Will Come

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Do what, you ask? Why, financial planning of course. Now I’m not talking about the off-the-shelf variety where you spend a little bit of time gathering data from the client and produce a “cookie cutter” analysis. I’m referring to the type of highly customized plan the wealthy are looking for, which begs another question. Who needs this type of service?

In the strictest sense I would say everyone. However, the question each of us has to answer is this: “Which segment of the marketplace do we want to focus on?” Another question of relevance: “What is our perception of planning?” If it’s merely a way to sell things, then it will likely come across that way to the client. If you think of it as a “loss leader,” then are you really a planner?

Not trying to ruffle your feathers here, but ask yourself what it is that a planner does. If you said “financial planning,” then you are correct. If you hold yourself out as a planner but aren’t charging a fee, then perhaps you don’t believe you are you providing something of value.

So, what is the value you place on your ability to do planning? How much do you charge for your time? Granted, if you go through the entire process and the client doesn’t do business with you and you did it for free (or priced it very low), then you just spent a lot of time for no return. Here’s how I approach it.

In my practice, I use Excel with the added capability of probability analysis. The end product is a very thorough analysis complete with commentary and recommendations. It will usually take a minimum of 15-16 hours to complete the entire process. At $150 per hour, that puts the minimum fee around $2,250. The maximum fee may be $5,000 or more depending on the complexity of the situation. If the client doesn’t choose to implement with me, then I have been paid for my efforts. Obviously you have to be working with a certain level of wealth for this to work.

At the lower end of the wealth spectrum the “cookie cutter” analysis is more practical. In either case, we should present something of real value so the client will be thankful they work with us. If we don’t, they may find someone else. The moral here is simply this, “If you provide planning, do it to the best of your ability.” To put it another way, “exceed their expectations.”

If you do it well, they will come!


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