Ever over-eaten? To almost being sick?

My mother, Meg, had no sympathy for such a thing.

Like sunburn and talking too much, she reckoned you only had yourself to blame.

That’s the tricky bit.

Realising you are the problem.

Similar to the feeling of over-filling an advisory firm with too many clients.

It might have worked in the old days when compliance was nil, the fees were mainly up-front, and the ratio of advisers to clients was ridiculously high.

These days, the key to growing a sustainable advice firm is the opposite – losing prospects.


Once established, advisory firms can’t afford to secure all their prospects.

The habits of establishing, such as saying “yes” to every possible opportunity, need reinvention to a “no” habit.

Saying “no” or increasing prices is tough for an adviser growing an advisory firm because they are wired to help as many people as possible. They see the potential in everyone and validate their approach by believing that every client may one day grow into an ‘oak tree’ of a client or possibly refer one.

This is also hard for advisers based in regional locations where their ‘bush telegraph’ might label them as ‘elite’ with ‘big city prices’ and ‘local town rents’.

The fundamental issue with accepting every client is dependency.

Being busy is not the same as growing.

Like the local doctor in a small country town, having the time to handle growth demands is more challenging than predicting Melbourne Cup winners.

The answer is not a new system or more team members, as both need additional skills, experience and management, which is already pressed.

The answer is to control losses.

To implement a fee tension.


Markets define value.

While imperfect, slow and subject to manipulation, an advisory team’s clients are better than competitors, compliance officers, regulatory authorities and consultants at identifying what is of value to them and how much they are prepared to pay.

The first step for advisory teams who do too much for too many clients for too little money is to trust their clients.

But not all clients.

Imagine a scale.

At one end of your imagined scale sits a firm that wins none of the ideal prospects it tries to engage.

Something is wrong with the firm’s proposition, price or both.

At the other end of the scale sits a firm that wins every ideal prospect it meets.

The proposition appears to be good, but the price is still wrong.

The issue is advice capacity and dependency, both of which are in limited supply.

Winning every ideal prospect believing this will bring sought-for success and growth, assumes filling a bottomless cup.

As I’ve written before, adding more team members without funding growth capacity will create more significant challenges, busier workloads and value traps.

Trusting clients to determine value means finding a ‘point’ on the above imaginary scale between winning and losing every ideal prospect.

This is the point of ideal fee tension.

I reckon it is about 66% for new prospects.


When an advisory firm’s pricing for new clients is determined based upon two out of every three ideal prospects valuing the proposition and proceeding on the stated price, the market has spoken.

Important to note is that all three are ideal prospects, but only two value the proposition at the proposed fee.

That is market pricing.

Tracked over twelve months, a Fee Tension of 66% ensures a price alignment with most clients, but it significantly improves advisory team profitability.

Profits fund growth, not revenues.

While most firms maintain Fee Tensions in the 90% decile, a ‘drop’ to 66% seems ridiculous. My advice for these is to make it gradual.

There are other Fee Tensions besides new prospects Fee Tensions. There are varying Fee Tensions for existing, breakthrough, niche, and dream clients. Different team members may also have different Fee Tensions from their peers and at different stages of their careers.


Some significant blockages skittle efforts to implement fee management with Fee Tension.

The big one is worth.

Many advisers are unprepared to learn what their clients believe they are worth.

Advisers understandably but incorrectly attach their worth to their price rather than value.

This belief has driven the narrative underpinning keeping advice affordable.

While crucial for product advice, insisting quality comprehensive advice be built upon affordability rather than value is an inevitable race-to-the-bottom favouring the pricing power of large industry providers.

Another blockage is power.

The most powerful, large and influential industry participants don’t use Fee Tension.

Fee Tension does not work for the banks, insurance, investment, wealth, superannuation groups and their distributors as they make their money clipping a margin from every single dollar of their client’s money.

Advisory teams, influenced by the paradigms that have built today’s most powerful participants, have sought to grow by leveraging the models and platforms of the powerful they partner with rather than trusting the actual value of the clients they serve.


Like over-eating, successfully implementing Fee Tension is not without consequences.

Can a client be a client for life for advisory teams constantly re-pricing their existing clients with a Fee Tension (e.g. 80%) less than natural attrition rates?

Should two senior advisers, with similar fees, but one has a New Client Fee Tension of 90%, and the other has 66%, be equally remunerated in a profit share?

Can advisory teams grow out of stages of chronic lack of resources or battling extraordinary circumstances with Fee Tensions of less than 50%?

Will regulators allow advisory firms to price on Fee Tension rather than ‘competitive, regulatory ranges’?

Markets work.

The advisory teams that trust their clients and price accordingly will still have to work hard to manage the proper Fee Tension for their growth.

I prefer to manage the consequences for these firms than the consequences for those advisory teams that remain fixated on pricing their value on mechanisms that started this industry – hours, products, manufacturing or regulatory guidelines.

Over-eating can be managed.

So can growth.

What do you reckon?




Photo credit: shutterstock_1226830057



For over 30 years, Jim has influenced, coached, and consulted advisory firms across Australia. His consulting firm, Certainty Advice Group coaches, trains and builds advisory firms delivering comprehensive, unconflicted advice, with fees priced purely on value. He is growing a solid and collaborative community of advisory firms aligned on Australia’s only Certification Mark advice standard for comprehensive, unconflicted advice – Certainty Advice.  He has authored four books regarding financial advice with his latest – What Price Value – available now since its release in March 2022.

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