Troy MacMillian in Perth runs one of the advice firms of the future.
His firm, The Wealth Designers, is finding it hard to manage the overwhelming demand for their advice services. They are now using minimum pricing as a tough, but effective means of handling the demand.
For Troy and most professionals, it is very hard to come to grips with the fact that due his success, he has to leave people behind, who just a few years ago, were the bread and butter of his firm. These are real people, with real challenges that need good advice. It’s Troy’s and most professionals natural instinct to help everyone and this has governed his thinking to date.
However, if he took on more advice clieints that were below his minimums, the results would be similar to loading in more passengers than a plane can safely carry. Many small advice businesses continue to think that “you have to bite off as much as you can and then chew like crazy”. They end up with a trainwreck that demands more and more time without corresponding profits.
Troy pinches himself to check if he’s dreaming when he relates how quickly his minimums for advice have grown from hundreds to thousands to tens of thousands of dollars. This doesn’t make it any easier, nor will it. The alternative of trying to be everything to everyone isn’t a path that he wants his firm to take.
The theory is easy to understand (read it straight from What Price Advice page 87), but the implementation of minimum pricing usually requires marathon-type focus. Obviously for some clients that clearly don’t fit your advice proposition or you don’t want to work with, minimum pricing helps you explain your reasons not to proceed.
This is Troy’s third evolution at building his ideal advice firm, and it certainly won’t be his last. Young, ambitious, focussed on being the centre of his clients’ financial world, his is the sort of firm that is flying beneath the radar today, but will be a well-known brand name in the niche’s that he wishes to serve.
What happens to those that fall below minimums? That’s where great firms like Bill Danaher’s QInvest step in. These guys represent one of Australia’s best models of scalable, independent advice and I’m convinced will be a model for the future…but that’s another post later on.
What do you think about minimums?
Over to you…
photo credit: ca06