How do you price your advice?

When delivering your advice, do you price the whole job?  (Or just your piece of advice?)

There are a number of reactions to this question.

A common response is something like: “No. It’s irresponsible and, in fact, stupid to put yourself and your firm in a position where you might take the liability for components of the advice for which you are not technically qualified to quote. You are going to need good lawyers if you do that.”

Another common response is: “No. If it’s not my expertise, how can I price it?”

And, this one: “Who prices like that? That’s not how this industry works. We price just what we’re good at and we intend to stick to what we know.”

So, what’s your response?  

How do you price your work when there are different ‘components’ required for your advice clients?

Obviously there are cases where the clients seek just one unique piece of advice. Like when I go into the supermarket to buy just the milk. (Interestingly – this might just be me but – often I end up walking out with lots of other stuff having forgotten the milk!)

There are many instances every day where there are many ‘components’ to the financial advice that our clients need.  There’s often advice regarding superannuation, or advice regarding transition to retirement, or a self-managed superannuation fund, or investments, and of course risk.

It doesn’t stop there.  There’s often work required on the client’s financial structures, as well as potential mortgages or debt raising.  Of course, there’s also estate planning and for some clients, property and direct shares. The list can go on … and I haven’t even mentioned tax (a very contentious issue considering our Assistant Treasurer David Bradbury currently deciding whether it is worth proceeding with a new government bill requiring ‘planners’ to also get tax qualifications).

So, if it is ‘common’ that our advice is usually interwoven with ‘other financial aspects’ in our clients’ lives, how do you best price it?

I’ll discuss the two approaches I’ve observed in Part 2.

Image courtesy of digitalart / FreeDigitalPhotos.net

 


About Jim Stackpool

For nearly 30 years Jim has influenced, coached, and consulted to advisory firms across Australia. As founder of Certainty Advice Group, he leads a like-minded team of professional advisory firms seeking to create greater certainty for their clients. As an author, blogger, columnist, and keynote speaker, Jim is regularly called upon for his professional insights into the advice industry. His latest book Seeking Certainty is available now.

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