/ by Don Connelly / Best Practices / 0 comments
The simple answer is easy: According to the Bureau of Labor Statistics, personal financial advisors, on average, made $121,770 in 2018. Translated into an hourly figure, the typical financial advisor made $58.54 per hour, assuming a 40-hour work week.
That’s a mean average, though, which is skewed significantly higher by a few highly successful advisors at the top of the profession. The median average is much lower: $88,890 per year in 2018, or – again assuming a 40-hour work week — $42.73 per hour. “Median” means half the advisors surveyed earned more than that figure, in that year, and half of them made less.
The lowest 10% nationwide made $41,590, or $19.99 per hour – assuming a 40-hour work week. The top quartile of the profession earned $157,710.
But few of them became that successful by working a mere 40-hour work week in their early years!
Here are a few factors to consider to maximize your earning potential.
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Factors Financial Advisors Should Consider When Choosing a Fee Structure for Their Practice
/ by Don Connelly / Best Practices / 0 comments
Among the more critical decisions a financial advisor must make is determining their fee structure—what to charge clients and how to charge them. After all, the fee structure sets the tone for how clients perceive the value they receive from your services.
If clients feel that the fees are too high relative to the value provided, it can lead to dissatisfaction and attrition. Conversely, if they perceive your fees as fair, it can foster trust and long-term loyalty. However, if they are too fair, it could threaten your business’s bottom line and sustainability.
Choosing the proper fee structure is a delicate balancing act for advisors. It requires consideration of client expectations, business sustainability, and your own financial goals. Your fee structure should align with your business model and client base, leading to stronger client relationships and business success while fulfilling one’s fiduciary obligations to clients.
Here are the pivotal factors to consider when determining how to structure your fees:
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The Fee Discussion: It’s Not the Fees That Bother Clients. It’s the Mystery Surrounding Them
/ by Don Connelly / Managing the Relationship / 0 comments
For many advisors, discussing fees with their clients is about as comfortable as going to the dentist. They know they have to do it, but they’d much rather be doing something else. Why is that? Is it because they don’t feel their fees are justified? Are they afraid the client will balk at them? Are they concerned they will ruin the rapport they built up to that point?
It may come as a surprise to advisors, but clients expect to talk about fees. In fact, for most clients, it’s not the fees that bother them; it’s the mystery surrounding them when they don’t get the whole story. Some clients have a hard time understanding how fees work, which makes them feel uncomfortable. But they feel worse and may presume the worst when they don’t feel they’ve received all the information.
The fee discussion is a pivotal moment in the process and can set the tone for the relationship going forward. It’s also an opportunity to differentiate yourself if you do it right. That’s why it’s essential that advisors be well-prepared with a practiced presentation and the confidence to deliver it with the highest degree of transparency and professionalism.
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How Advisors Can Inoculate Themselves from Fee Compression
/ by Don Connelly / Best Practices / 0 comments
In our last post, we highlighted four critical issues financial advisors face in the aftermath of the COVID pandemic, impacting the way they approach their businesses and the way clients are responding. In the next month or so, we will take a deeper dive into these issues, the challenges they present, and how advisors can meet them head-on for a greater chance at success.
At the top of the list—an issue familiar to all and well-covered here in past blog posts—is fee compression.
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Overcome the Fee Discussion by Focusing on the Things that Matter to Your Clients
/ by Don Connelly / Marketing Yourself / 0 comments
Among the many trends affecting the way financial advisors must operate these days, fee compression has been the most impactful. The discussion of fees charged by advisors has moved to the forefront due to the low costs and transparency of digital advice platforms and the highly competitive arena in which they find themselves. As a result, clients are more willing to confront their advisors on the subject of fees and the value they receive in exchange for them, catching many advisors off guard.
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How Much Do Financial Advisors Make?
/ by Don Connelly / Best Practices / 0 comments
The simple answer is easy: According to the Bureau of Labor Statistics, personal financial advisors, on average, made $121,770 in 2018. Translated into an hourly figure, the typical financial advisor made $58.54 per hour, assuming a 40-hour work week.
That’s a mean average, though, which is skewed significantly higher by a few highly successful advisors at the top of the profession. The median average is much lower: $88,890 per year in 2018, or – again assuming a 40-hour work week — $42.73 per hour. “Median” means half the advisors surveyed earned more than that figure, in that year, and half of them made less.
The lowest 10% nationwide made $41,590, or $19.99 per hour – assuming a 40-hour work week. The top quartile of the profession earned $157,710.
But few of them became that successful by working a mere 40-hour work week in their early years!
Here are a few factors to consider to maximize your earning potential.
Read more
Combatting Low Fees
/ by Don Connelly / Marketing Yourself / 0 comments
If you ever need to combat lower fees, begin by understanding what your competition is actually doing. Then form your strategy accordingly.
Listen to this audio episode or read the transcript below to learn how to de-commoditize yourself and why you need to win the value-argument instead of the fee-argument.
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