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Financial Planning > Behavioral Finance

Charging planning fees 
changes everything

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When Dave and Susan visited our office for the first time, they had no idea they’d be receiving exactly what they want, and paying handsomely for it. What they wanted from me was a plan for their future.

They didn’t want a sales pitch or a product endorsement; they can get that anywhere. What they desired was clarity about how to integrate all of their assets and income streams, benefits, and insurance policies. They desired to know, without a doubt, how much they would receive from which account and for how long.

As the advisory business matures, and policymakers have their way, those who hold themselves as financial advisors better be ready to actually advise.

Gone will be the days of dinner seminars, big commissions and product-centric reps. This new era of planning will usher in, well…real planning. And even if I’m wrong about this, there’s real value in pretending I’m right.

The real value to you is to assume that the only advisors remaining in business down the road are those who build comprehensive financial plans for their clients, and charge a fair fee for those plans. 

While everything has not yet changed in our industry, your end-of-year planning will certainly benefit from acting as if it has. By that, I mean you should find a way to retool your advisory practice to incorporate financial planning fees, paid by people who desperately want a real financial plan. You should reconsider your marketing, messaging and client experience.

Let me admit I wasn’t always courageous enough to charge financial planning fees. In fact, the thought of losing a potential client because they’d resist paying a fee was almost enough to send me into a panic.

In spite of that, we retooled our process, and I found the courage to charge a client for the comprehensive advice I was able to offer. Can you guess what happened next? They said, “Yes.” We built a custom financial plan for this couple and they were delighted by the process, choosing to become clients immediately after receiving their plan. Since then, I haven’t looked back.  As all advisors struggle to differentiate themselves from others in a crowded marketplace, one way to do that is to simply be better at the very thing that clients want most. When I ask our prospects what that very thing is, the common response is: “We want a plan for our retirement.”

If that’s true, why not deliver them the highest level and most comprehensive plan that we can, allowing them to make educated decisions about their financial objectives, rather than simply trusting us because we’re nice guys and gals? 

As I encourage you to rethink how you practice your craft, I can imagine the objections you might have: the client might not be willing to pay, they might wonder who I think I am charging when others give free advice, I can’t afford to lose a potential client, I don’t know how to build a financial plan, etc. I assure you I had all of those fears. I still do.

But you know what? It’s very possible that DOL regulations may force us to rely on fees alone. Are you prepared for that? I wasn’t, but I am now.

Once you build your business around charging appropriate fees for the life-changing advice you can offer, you’ll cement your professionalism in the minds of your clients. You’ll gain a level of exclusivity that will attract more affluent clients. But most importantly, you’ll begin to do a much better job planning for your clients and their futures.

How do I know this? The moment you receive a check for a plan, you’ll want to become really sure you’re delivering an incredibly good plan because that’s the type of advisor you are.

Choosing to become a true planner is a choice. You can continue to do business as usual, but what’s considered usual may change quickly and dramatically.

When change does come, don’t you want to be on the right side of that change, reaping the benefits of having laid the groundwork for your reasons, not just because the “boss” told you to? What an exciting time to be in this business…the planning business that is.   


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