Advisers need to price their intangible value

Adviser fee pricing is multi factored and advice practices should put a price on their intangible value, according to a financial advice consulting firm.

Speaking on a pricing webinar, Peloton Partners chief executive, Rob Jones said adviser fees came in three layers – intangible value, services and advice, and structural complexity and additional value-add.

Jones said intangible value was the investment the client was making for their future and it was about identifying goals, and elevating those things to give them their version of financial success but that it needed to be distilled into a price.

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“I'd charge the client the whole fee on this if it was that important for them and whatever the other services as this is important,” Jones said.

“The second batch, of course, is those physical things – the moving parts relatively easy for us to be able to price in a pricing framework. But every single firm is different because their costs and their client profiles are different.”

The third area to price, Jones said, was the structural complexity and additional value-add areas which were things that clients did not need all the time such as estate planning.

“To be able to view a client through a matrix like this allows you to remain in step with clients and allows pricing to remain in step with the challenges of your business as well,” he said.

Source: Peloton Partners

When asked whether it was ethical for a more experienced planner to charge a client more for their service compared to a what a junior planner would charge for the same service, Jones said that would only be the case if they had a special level of expertise.

“The short answer is there is no difference. It's the firm providing the advice, and whatever the value is, it's going to the client. That value can be quantified and so be it and we don't just separate it out,” he said.

“However, there is an example of one individual’s expertise around executive share option schemes and it's deep. All we've done in that particular case is that we've allowed a higher fee relating to that specialisation. They are the only one in the organisation that's particularly strong in that area because of experience, but that's about it.

“Otherwise, ethics is not part of it. It's value, services, expense, training of advisers, profit margin, it's turning the lights on, it's everything else that is impacted, and a client should be no more or no less than what their circumstances define.”




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Too many advisers discount their fees at the expense of all. Too many fall for the corporate know it all's that bang on about fixed pricing while expenses sore. Start charging like your worth something or no one will take you seriously.

I think the Australian Public are quite capable at determining what value they get from ongoing advice and how much they are prepared to pay for it.

It is continually disappointing to read and listen to the claims of a bunch of shouty people who say ongoing advice relationships might be expensive, arguably are worth little to the client and an adviser client relationship perhaps should be transaction based only.

I wish those who say that would come and talk to my clients. They don't....

This is a good article. I agree that the intangible needs to promoted more.

Oh and one more thing. When will my clients finally get a say as to how they apportion value of the ongoing service we provide?

Too many advisers discount their fees at the expense of all. Too many fall for the corporate know it all's that bang on about fixed pricing while expenses sore. Start charging like your worth something or no one will take you seriously.

Money has always and will continue to flow to wherever it revieves the most value!

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