Last week, I told you about a recent client – Carlos, the 50-year-old Melbourne-based writer who agreed to a $12,000 engagement for an advice relationship despite having only $135,000 in super.
Advisers Matt and Kath could charge that fee because their fees are not based on assets or effort.
They are based on the complexities Carlos faces and the value he seeks.
But there’s a trap most advice firms fall into when they try to implement this model.
THE CAPACITY TRAP
Bee runs a comprehensive advice firm in Subiaco with her partner, Andy.
Fourteen team members.
Growing fast with big plans to expand across Australia over the coming decade.
When Bee started building her team five years ago, she watched other advisers do what seemed logical:
Hire junior advisers to handle “lower-value” clients ($3,000-$5,000 fees).
Keep senior advisers for “high-value” clients (fees of $8,000-$15,000+).
Build pods around individual expertise.
The problem?
Every good junior eventually became their own expert, with a pod of clients who had been trained to work only with them and to expect to meet with them.
The firm wasn’t reducing its dependence on experts.
It was multiplying it.
BEE’S DIFFERENT MODEL
Bee realised something critical early:
Her clients didn’t engage her because of her superannuation expertise or investment knowledge.
They engaged her for the confidence she provided.
“Other advisers would ask ‘what is your value proposition?'” Bee said.
“They’re surprised when I answer: we don’t have one.”
“I never know what my value proposition is until I meet the client.”
Value means different things to different clients.
Even within the couples we work with, the value they hope for can be different.
One partner might value buying the piece of land they’ve always wanted.
The other wants to help their kids before buying property.
And what they value changes over time.
While what clients value may change, Bee wanted an advice model in which the confidence her team provided and the worth of every advice relationship is enduring.
Worth is different from value.
Value is what the client experiences.
Worth is what an advice team consistently delivers.
Bee built her model on team worth, not individual expertise.
THE ACCESS MODEL
Bee’s current access pricing:
- New clients: $12,000
- Existing clients: $4,750
It doesn’t matter whether the client meets with Bee, Andy, or any of their fourteen team members.
It doesn’t matter whether the client has $200,000 or $2,000,000 in assets.
Access to Bee’s advice team starts from $12,000 for new clients.
Here’s how it works:
Every team member is skilled in discovery conversations – identifying what each client uniquely values.
This was crucial for her to establish the basis for enduring worth and value from a team approach, not just an individual.
Non-client-facing functions (compliance, administration, processing) are increasingly outsourced to offshore team members and, in some cases, AI agents.
Pod structure is flexible, not fixed.
Team members aren’t locked into “their” clients because value isn’t tied to any single subject-matter expert.
Clients engage the team’s worth, not an individual’s expertise.
THE ADVISER WHO GOT IT WRONG
I spoke with another adviser this week who thought he had implemented access pricing last year.
It wasn’t working.
The problem? He was still operating pods of individual experts, each with its own client list.
His “access fee” was really just a repackaged flat fee based on seniority:
- Senior adviser clients: $9,000
- Mid-level adviser clients: $6,000
- Junior adviser clients: $3,500
He thought he was doing value-based pricing.
But he was still pricing based on effort and expertise, not client value or team worth.
He also couldn’t let clients go who weren’t willing to pay his minimums.
He’d pass them down to busy junior team members and wonder why his capacity problems were getting worse.
His capacity issue wasn’t a systems or staffing problem.
It was a worthwhile problem.
He didn’t appreciate his team’s worth, believing his cheaper resources could handle the cheaper work, and therefore ruined his chances of ever controlling his team’s capacity.
THE DIFFERENCE
When you know your team’s worth, a team’s access pricing manages capacity.
Bee calculated her $12,000 minimum based on what the majority – not all – of new clients were willing to pay for access to her team.
Some prospects walked away.
That’s the point.
Access pricing isn’t about serving everyone.
It’s about serving the clients who value the team-based relationship enough to pay for access, not just the expertise of a single expert.
The clients who left weren’t going to help Bee build the business model she needs to support her enduring growth and ambitious expansion plans.
WHERE ARE YOU WITH THIS?
I’ve been writing about value-based pricing all month – Carlos, Joe and Tom‘s minimums, now Bee’s team model.
If any of these stories have resonated with you, the problem could be your value proposition – i.e. you.
Jim
Photo Credit: shutterstock_1788695051