Ever had the feeling you are doing too much, for too many, for too little return?
There is a better way.
Learn to uplift.
Consistently.
Specifically.
Successfully.
Sam and Sarah are a father/daughter advisory team building a solid, comprehensive boutique advice firm on the outskirts of Sydney.
Sam has been in the industry for years.
Sarah is finishing her advice studies.
Sarah reached out about a growing problem.
“Sam and I are arguing about fee uplifts for clients”.
“He commits to jobs without an increase in fees”.
“He shuts down our arguments with reasons why it is never quite the right time to raise fees, while it is OK to do additional work for them”.
“This is not just an isolated case; this is a pattern of under-charging”.
Helping some financial advisers with a fee uplift conversation is like getting a cat into a bath.
Sarah continued.
“One guy is calling at least weekly because his business is in a bit of trouble. Sam spent most of last Monday with him and believes we can’t charge more because of their cash flow issues. He also reckons once they’ve fixed the cash problem, we’ll definitely be able to charge higher fees”.
“But what happens if the cash flow isn’t fixed? We’re also losing. It just does not make sense”.
Sarah spoke of another case with a past client, Bob.
Bob was a client prior to COVID and has only been paying a minimal ongoing fee since then.
However, he started calling Sam a couple of months ago, as his marriage is ending, and he is using Sam for free advice at all times of the day and night.
Again, Sam believes he will pay once the estate is settled.
In addition to cases like Bob’s, there is a larger uplift project for many existing clients that have been sitting untouched on Sam’s desk.
THE ISSUE?
The issue is usually less about the client underpaying and more about an adviser undercharging.
Why?
Because an adviser’s greatest strengths are often their greatest weaknesses.
They find it extremely hard to turn their backs on anyone who asks for help.
They usually focus on the good in people.
They have gained hard-earned experience knowing that patience and time will pay off eventually.
They also hate losing opportunities.
Sarah nailed Sam’s challenge..
“While Sam is OK engaging new clients with good fees, when it comes to uplifting existing clients, it feels like he is not wired for those conversations”.
Sarah understands the issue, but her preferred approach misses both the cause and the opportunity.
Sarah believes the required approach is simple.
“Here’s the fee, pay up or move on!”
Firstly, Sarah’s approach does not address the fundamental issue.
Uplifts would be easy if Sam didn’t care about these people.
However, like most advisers, he really cares if they don’t get the support they need.
But uplifting their fees and claiming to help them seems contradictory and potentially seen as an insincere gesture disguising a grab for more money, which can only make their lives even harder.
THREE UPLIFT STEPS
An adviser’s assumptions are often the cause of anti-uplift avoidance.
But they also provide the keys to open and manage more successful uplift conversations.
Why?
Most of an adviser’s assumptions regarding uplift conversations are untested and thus poor.
Testing these assumptions is the first step in a three-part process for more successful uplift conversations.
We workshopped Sam’s assumptions and created the following for Sam’s uplift conversation with Bob…
“Bob, you may not have been expecting a fee until later”.
“You may have assumed our fees are aligned with the amount of funds we will manage for you.”
“Our fees are different to other advice firms as we charge based upon value rather than products or amounts of time.”
“You may also be concerned that you don’t have available funds to pay us a fee at the moment.”
We then worked on the second of three steps – identifying the value driving the advice Bob needs as clearly, deeply, and uniquely as possible.
This was something like:
“Bob, our advice intends to maximise the probability of rebuilding your bank balances, of recreating the reserves you want to share with your kids and grandkids, plus helping you downsize to a new property somewhere near the beach, and eventually get you back onto a new boat for long weekends at your favourite spots high up in Pittwater.”
Finally, the third step—the fee conversation.
“Bob, our estimate of fees for the next twelve months to help you achieve this value is between $12,000 and $14,000. We want to work with you to maximise the certainty of achieving what is of value to you and help you move beyond this divorce.”
“How would you like to proceed?”
Bob agreed to the uplifted fees.
Learning to uplift is essential not only for the better growth of advice teams, but more importantly, for greater confidence and fewer assumptions that hinder the actual value of advice that clients experience.
What do you reckon?
Jim
Photo Credit: uplift_shutterstock_2265299817