The Fee Discussion: It’s Not the Fees That Bother Clients. It’s the Mystery Surrounding Them

The Fee Discussion: It’s Not the Fees That Bother Clients. It’s the Mystery Surrounding ThemFor 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.

Watch the Webinar Replay, Fees: Avoid the Race to the Bottom, for some ideas on how to justify your fees with а great value proposition, how to make yourself priceless, and how to make the fees issue irrelevant.

Get out in front of conversation

To begin with, you should never wait for clients to bring up fees. They may wonder why you haven’t brought them up—as if you might be hiding something. Remember, the whole advisory relationship is about money—theirs primarily, but clients want to know how you are compensated. If you let it linger in the back of their mind, they will be distracted from everything else.

Reassure clients it’s OK to ask questions

Let your clients know that you don’t want them to have any lingering questions—that no question is too small. Make it a discussion, allowing your clients to interact as you explain. When clients do have questions, you must be ready to answer them in a straightforward manner, checking with them to see if they are satisfied.

Link fees to specifics

It’s essential to be as detailed as possible when explaining your fee structure. Clients will have an easier time understanding your fee schedule when it’s applied to specific services you provide. Avoid linking fees to intangible aspects of your relationship which have a more subjective value. You’ve already explained what you bring to the relationship, which your clients view as value-added.

Leave nothing out

It’s a natural instinct for people to feel as though there’s another shoe that will drop when talking about fees. They will feel deceived if something shows up on their account statement you didn’t explain. You should end your fee discussion with an emphatic “PERIOD” to answer the “Is that all there is?” question in their mind.

Get the mp3, Mastering Client Relationships: What Elite Advisors Do, to develop and hone the soft skills needed to build and nurture healthy relationships with clients.

Revisit your fee schedule

Make it a point to review your fee schedule at annual client meetings and have them review it. By that point, you will have demonstrated your true value to your clients, and there are not likely to be any issues. But it’s important to reinforce with your clients what they are paying and why they are paying it.

Never, ever apologize for your fees

Your fee schedule represents your worth to your clients. If it’s appropriately structured, explained thoroughly, and you are able to back it up by providing a superior client experience, you should have the confidence to wear it proudly. That includes the confidence to refer a disagreeable client to someone else.

Watch this 3-minute video to learn how our 24-step training program can help you take your business to the next level.

(Figuring out the true value underlying your fees is one of the modules in this program.)

See program details and enroll today!

Available as a self-paced program (always open) and as a 12-week coaching program (open only a couple of times a year), this training will change the way you view your practice and give you an enormous advantage over your competition. Select your format and enroll today!


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