Time to re-price old clients

Advisers should value their services and not fear charging what they're worth, expert says

Sep 12, 2013 @ 2:47 pm

By Liz Skinner

Changing what advisers charge existing clients may be the best way to boost firm profitability, a consultant told advisers at the Financial Services Institute Advisor Summit in Washington yesterday.

Some experienced advisers have increased fees for new clients in recent years after considering all the services they provide, including tasks like restructuring flawed estate plans, helping plan for the care of elderly parents and negotiating mortgages, said Giles Kavanagh, managing director of Pusateri Consulting and Training.

However, a lot of advisers are hesitant and “uncomfortable” about changing the prices they charge their longstanding clients, he said. And that pricing discrepancy is leaving money on the table.

"Re-pricing current clients is the best way to improve your profitability in a justified way," Mr. Kavanagh said.

Advisers should be upfront and tell existing clients they are “correcting” their prices to a fair level after analyzing benchmarking studies, he said. Offer customers a few months to consider the increases and tell them, “We hope you'll come along.”

Mention something about the future, too, he said, suggesting: “Looking forward at your situation and the markets, we believe that our value to you going forward will be even greater.”

Many advisers worry clients don't really appreciate the varied levels of service they offer and fear charging higher prices will reduce asset retention. However, industry surveys suggest otherwise, Mr. Kavanagh said.

“Clients value trust and performance more than price within the overall advisory experience,” he said.

Mr. Kavanagh praised one adviser who addresses the issue of price increases directly with people even before they are clients. She says: “This is my price and it will go up over time.”

0
Comments

What do you think?

View comments

Recommended for you

Sponsored financial news

Featured video

Events

What's the first thing advisers should do when they get home from a conference?

After attending a financial services conference, advisers can be overwhelmed by options, choices and tools. What's the first thing they should do when they get back to their office?

Latest news & opinion

Is Fidelity competing with retirement plan advisers?

As the Boston-based mutual fund giant expands the products and services it brings to the retirement market, some financial advisers say the firm is encroaching on their turf.

Whistleblower said to collect $30 million in JPMorgan case

The bank did not properly disclose that it was steering asset-management customers into investments that would be profitable for JPMorgan Chase.

Social Security underpaid 82% of dually entitled widows and widowers

Agency failed to tell survivors that they could switch to a higher retirement benefit later.

If Finra eases firm oversight of outside business activities, broker-dealers could lose revenue

Brokerage firms would no longer be able to charge reps for supervising nonaffiliated RIAs.

Galvin charges Scottrade with DOL fiduciary rule violations

Action of Massachusetts' top regulator shows states can put teeth into a rule under review by the Trump administration.

X

Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting investmentnews.com? It'll help us continue to serve you.

Yes, show me how to whitelist investmentnews.com

Ad blocker detected. Please whitelist us or give premium a try.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print