The last identifier of an Ideal Advice Client is about value.
Does the client value your advice enough to pay for it?
Ideal advice clients do, not every time, but for most of the time.
This is different from the question many advisers stumble over – can the client afford our advice and service?
Most advisers stumble over this question because of their limited experience with pricing advice (and too much experience with product-based pricing). Years of bad pricing reinforce entrenched habits and mindsets of what represents value for your advice clients.
The origins of our emerging profession have hard-wired the majority of today’s advisers to underprice their advice whilst overpricing their products or ‘platforms’ or hourly rate offerings. The underpricing mindsets are pervasive and common among most professionals (not just financial advisers but lawyers and accountants and others).
“I won’t charge them as much money up-front to ensure we don’t scare them away, knowing we’ll probably get the on-going fees”
“They won’t be able to afford our advice, and if it weren’t for product commissions/platform trails/on-going fees, they would be stranded leaving real advice only available for the wealthy who don’t need the advice as much”
“You can’t charge a fee up-front for insurance, that’s just not how it works”
“Our advice clients generally pay us $4000 per annum and we think that’s fair for the services we provide”.
“I really believe that those advisers who say they are charging $perceivedhighamount for their advice and pure and simply ripping off their clients. There’s no way they could be delivering value at those ridiculously high fees, there’s no way on earth. They should be ashamed of themselves.”
The choices that ideal advice clients make about the value of our services depend solely upon the context of our advice.
Therefore provided the context of our advice is based upon the delivery of a caring professional relationship where we are not afraid to compromise our advice to best assist our client overcome their real challenges to achieve their desired life outcomes, then we have our best chance to demonstrate value and for our fee to be best evaluated as being reasonable.
Even if our fee might short-term incur more debt in their lives.Affordability is more than having the money available.
Notwithstanding the advice scandals where people have trusted and fallen foul of horrendous sales spiels, your ideal advice clients often can’t afford NOT to take your advice.
What do you think?
Remember the previous four traits? Here’s the first, the second, the third, and finally, the fourth.
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.