Last month, Joe and Tom from Canberra engaged three new clients.
The minimum annual fees for all three were the same – $12,000+gst.
For Joe and Tom, it doesn’t matter if the prospect meets with a junior or senior adviser, nor does it matter if the original enquiry is about an SMSF, a retirement plan, a career shift or aged care; the minimum fee will be the same.
$12,000+gst.
This is access pricing.
Most advice firms price based on who the client sees:
- Senior adviser? $8,750+gst
- Junior adviser? $3,750+gst
Joe and Tom flipped this model entirely.
They don’t price based on individual advisers.
They price based on team access.
Here’s why this works:
1. Access fees control demand
Joe and Tom are good advisers.
When their minimums were between $6,000+gst and $12,000+gst for new clients, they were overwhelmed. Too many prospects, too much work, not enough time.
At $12,000+gst, demand dropped.
But revenue increased.
“Over six months, they went from 14 new clients at $7,150+gst average (=$100,100 total) to 10 new clients at $14,750+gst average (=$147,500 total).
That’s nearly 50% more revenue with about 30% fewer clients.”
More revenue.
Less work.
Clients who value the relationship.
2. Access fees eliminate expert dependency
Under the old model, prospects asked: “Will I be working with Joe, Tom or a junior?”
Translation: “Joe is worth $8,750+gst, juniors are worth $3,750+gst.”
Under access pricing, the question disappears.
The team delivers a minimum of $12,000 of value.
Who delivers it is the team’s decision, not the client’s demand.
3. Access fees are minimum thresholds, not effort calculations
Traditional pricing asks: “How much work will this client require?”
Access pricing asks: “What’s the minimum value a client must see to engage the team?”
Joe and Tom’s current answer: $12,000+gst.
Doesn’t matter if the client has no assets or $500,000 in assets.
Doesn’t matter if the initial enquiry is about a superannuation transfer or a retirement plan.
If the advice team or prospect don’t believe there is enough value with minimums at $12,000+gst, the prospect is directed elsewhere.
The shift most advice teams can’t make
Last week, I spoke with eleven advisory firms about implementing this model.
We engaged less than we agreed to proceed with.
Those we didn’t proceed with were all good firms – profitable, growing, offering comprehensive advice.
But they were not ready to make the mental shift to value-based pricing.
They’re still thinking: “My issue is not pricing, my issue is systems”
They might be right.
But their pricing doesn’t reflect their value or address their growing key person dependency.
The alternative
Access pricing says: “Our team delivers comprehensive advice. Access to that capability costs at least $12,000+gst in year one.”
It’s less about effort.
It’s less about assets.
It’s less about which individual advice team member your clients and prospects meet with.
It’s all about the value of accessing you and your team.
Cheers,
Jim
Photo Credit: CANVA_photos_MAGZQIs-7VA