Advisers concerned fee-for-service may result in increased client costs

Financial advisers are concerned that a switch to fee-for-service may result in increased costs to clients, according to Elixir Consulting managing director Sue Viskovic.

Although many advisers are eager to make the transition to a fee-for-service, their biggest fear is advising clients that they will need to charge them more, Viskovic said.

She said advisers are more worried about the effect that increased charges would have on existing clients rather than new clients.

But Viskovic believes that as long as advisers explain and document the services they will deliver for a fee, the percentage of clients lost will be low.

She said advisers need to regain confidence about their worth.

“It’s not that their clients don’t want to pay, it’s that the [advisers] are worried about asking them to,” Viskovic said.

She said advisers often spent too much time with, and took too many phone calls from, smaller clients and weren’t being paid for it.

“Every adviser has some clients in that category,” Viskovic said.

She said that advisers’ larger clients often subsidised their smaller clients.

But now is the time for advisers to start charging smaller clients more, provide a pro-bono service or get rid of the client, Viskovic said.