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Business tips: Is tiered service always right?

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Many firms adopted tiered service following the RDR, which typically comprised three levels from full financial planning through to transactional. Since then, firms have a better understanding of costs and client reaction to prices and many have moved to a more informed decision about who to target and what service they really value.

This has resulted in more firms offering a single service with variations in the amount of service that clients buy as opposed to distinct packages of service.

If you answer “yes” to these questions, consider a single service policy:

  • Are over 80 per cent of your clients very similar in terms of their service needs?
  • Do you provide the same components of service to clients, with some simply buying more of your time and expertise than others?
  • Are more than 80 per cent of your service outputs to clients identical?
  • Do most of your advisers operate in a similar way with similar clients?
  • Do you have very few pure transactional clients?

A single service structure is not for all firms but the benefits are streamlining and consistency which can be harder to achieve under a tiered structure. 

David Shelton is the author of The Business of Advice book and website www.businessofadvice.co.uk

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