Distraction-Proof® Advisor Ideas

Are you charging people for financial plans? If not, you should be, and here’s how to communicate it.
…

I love getting this question from advisors! I had an advisor bring this up yesterday, so that’s why it’s top of mind, and you can hear my excitement in the response.

This advisor has been doing a phenomenal job for her clients, but up until now, she’s been offering plans at no cost, as what she thinks is a value-added [service]. While it is a value-added, it’s a very, very valuable addition that she’s giving away for free.

You can’t do planning for free! It’s a phenomenal service for your clients. It also takes an inordinate amount of time for you, the advisor, and so you need to get compensated for this. Now, more than ever, is a great opportunity to clarify to clients why you charge for this.

You’ve heard me mention before about explaining the two facets of how you work when you get asked that question: “There’s the investment management component, and there’s the financial planning aspect of what we do. We focus more on the financial plans, to begin with…” And then you can let people know your cost: “For a basic financial plan we charge $1500,” or whatever pricing you want to set and that you’re comfortable with.

Here’s why you need to be charging and communicating why you’re charging for financial plans. Over the last year, people have become more concerned than ever about what really matters regarding their financial landscape. They’re not so concerned about the stock market’s ups and downs; they’re needing to analyze cash flow. They were planning retirement for two years down the track, but they were furloughed and now made redundant. Now how do they live? They were thinking about tapping Social Security in three years’ time, but now they’re needing to take it right away. What does their future financial well-being look like now? These are serious questions that are answered by doing a comprehensive financial plan. Yet, that takes a lot of your time, focus and attention, and you need to get compensated for it. Tax laws are changing, and you need to be aware of that so you can communicate those details to your clients.

You can simply say, “There’s a myriad of things that have changed because of last year. I need to make sure I’m on top of all these things as I prepare your financial plan so that I can advise you appropriately. This takes time, and I need to be compensated for that.”

You want to get comfortable using language like this to communicate to people, “You need a financial plan, and, by the way, it’s a phenomenal service that you should expect to pay for. The plan is dynamic by nature, so once it’s done, we can continue fine-tuning it as we move forward. The fee is just a one-time payment.” Or use appropriate words for however you like to structure your fee.

When you’re looking to move from doing free financial planning to charging a fee for the services and tremendous help you provide,

1. Get comfortable with the thought of charging for what you do. You need to own this and believe that you are truly going to earn your fee. Believe that you’re providing something of great value that people should pay for.


2. Practice the language that you’re going to use to communicate what and why you charge for preparing a plan. You can use some of the examples that I’ve provided. Let clients know you’re getting calls from people concerned about cash flow, or concerned about retirement so that you give them an idea of the kinds of problems you solve.


3. This is the big one: from now on, no one gets a free financial plan! From this day, going forward, you’ve got to have the resolve that in your business when people come to you inquiring about planning, you let them know that you absolutely provide it and you totally believe in it! And because it’s so valuable, tell them what they can expect to pay.

Implement charging for financial plans into your business. Not only are you going to greatly increase your value to clients, you’ll also be building a more profitable business.

I look forward to bringing you another Distraction-Proof Advisor Idea next week.