Many senior advisers at advice firms cling to a quiet but often false assumption.
They usually don’t say it out loud.
It’s a very influential assumption. Particularly in client meetings, discussing workflows, and when making hiring decisions.
The assumption is this: clients pay our fees because of me.
My experience.
My reputation.
My clients’ referrals.
My network introductions.
My results and experience earned over my years of delivering good advice.
If that’s true, and many senior advisers act as if it is, then it follows that an associate adviser can’t engage a new client at the same fee, or an existing client at a significantly higher fee.
At least, not yet as an associate.
It’s a common assumption.
It’s also wrong.
THE MEETING
Two years ago, a senior adviser I work with was on holiday interstate.
His firm had a new client engagement meeting, which could not be easily rescheduled during his holiday period.
The prospect, a referral from an existing client, expected to meet with the same adviser who chaired the Discovery meeting in their Engagement meeting.
The senior adviser didn’t cancel.
He didn’t reschedule.
He contacted the prospect, telling him that he isn’t available for their engagement meeting, but that his associate adviser, who also attended the prospect’s discovery meeting, and the firm’s practice manager will meet with him and present the firm’s recommendations.
They did.
The clients engaged.
At fees of $22,250 + GST.
The associate had been with the firm for less than twelve months.
The practice manager for even less time.
This was a breakthrough for this team and has since been repeated.
It wasn’t a one-off.
Across firms in my Certainty Advice program, I’ve witnessed associate advisers engaging new comprehensive clients at $ 12,000+ GST.
Same minimum fee as the senior adviser.
Importantly, the fees are not based on FUM.
They are based on client value.
One outstanding advice team pushed their associate advisers more quickly than most, chairing Discovery and Engagement meetings and achieving good (i.e., 70%+) engagement rates at the firm’s minimum comprehensive new fee level (e.g. $ 12,000 + GST) in under eighteen months.
The majority of firms have their associate advisers at good engagement rates, at fees similar to those of seniors, within approximately 24 to 30 months.
In these teams, the senior advisers help their associates prepare, but they hold back in meetings (referred to as playing a 2nd Chair), aiming not to drive the discussions. They provide support for technical issues, but work hard at ‘sitting back’.
Importantly, and sometimes most difficult, they aim not to ‘close’ the prospect.
That responsibility sat with the associates.
Most clients engage.
At full fees.
WHAT CLIENTS ACTUALLY SAID
The client feedback was consistent across firms.
Clients arrived for their initial meetings expecting to meet with the senior adviser, the expert they had nearly always been referred to. Some clients initially appeared surprised to find themselves sitting in meetings chaired by an associate.
Surprise is often quickly replaced by immersion.
Immersion in a deeper conversation than expected about why the prospect was seeking advice.
Senior advisers hadn’t fully anticipated how impressed their prospects were with the new approach.
When properly positioned, controlled, and facilitated as a team, prospects discover value that is significant to them and well beyond the advisory team’s technical expertise and capability.
Despite the associate’s relative inexperience, the quality of the client’s discovered value creates the connection not with a single expert, but with an expert team, who not only understands what the client significantly values, but also understands how to position the expertise and capability required to achieve that significant value.
When teams can position their fee on what the client values, positioning is crucial, but fee conversations require less defence compared to positioning a fee on a range of technical services.
HOW DID THE ASSOCIATE POSITION THE FEE?
Not on funds under management.
Not in their years of industry experience.
Not on their qualifications.
Not on the hours of effort required.
Though important considerations, the fee was structured by first articulating the team’s understanding of the detailed value each client is seeking and second by showing the links between the required steps and the outcomes sought.
That positioning skill is not a personality trait.
It’s a skill.
And it can be taught.
WHAT THE SENIOR ADVISERS SAY NOW
Senior advisers who see their associates move from 2nd Chair to 1st Chair say the same thing.
They wish they’d done it sooner.
They wish they had ‘let go’ earlier.
The decision to stop treating every new client meeting as one that required them to chair it.
That single assumption, that clients pay our fees because of me, had been quietly setting a ceiling on what advice teams could become.
And quietly making their firms more dependent on seniors, not less.
And quietly becoming the biggest reason why the more successful advisers become, the less time they have.
The question worth sitting with isn’t whether current or future associates could take on the 1st Chair quicker than expected.
It’s whether advice teams are teaching them how.