Marketing myopia is a result of the very understandable inability of people involved in an industry or business to see with true objectivity what is coming next. It is also exacerbated by the seller of any goods or service concentrating their thinking on the product rather than on customer needs.A historical example of extreme marketing myopia is Hollywood film producers in the 1940s saying: “Television will never catch on.” Ultimately, of course, the customer will decide what they will and will not pay for and it is dangerous to try and do their thinking for them. In many respects, this view also leads to a rather self-fulfilling prophesy. If you do not bel-ieve in the merits of charging a fee for what you do, how can you convince your clients to believe? Those who believe the opp- osite tend to find that clients, when presented with a valued proposition, are quite willing to pay fees. People who dev-elop a successful fee-based business understand and dem- onstrate client value and structure a fee proposition which is palatable to their clients and profitable for themselves. A fee-based business is totally different to a commission-based business. It is a different culture, mindset and proposition and requires the business to take a longer-term view around its income strategy. Be comfortable foregoing the lure of potential high commission earnings on the bigger cases, which are getting fewer in number, in return for the dependability of ensuring you get a fair and balanced return for everything you do. It is about everyone paying equitably for what they receive, not about less and less Peters paying for more and more Pauls in a decreasing commission world. It is about a broader relationship, providing a deeper level of service which does not simply relate to financial products. In a commission world, you may typically require a client base of 400-500 to generate a turnover of, say, £100,000 as you do not know which 100 clients will buy from you in any given year. This means you need to maintain files, update records and stay in touch with all these people. This also means some clients get less attention than you would ideally want to give them in order to demonstrate your real value. If you have 100 clients paying regular retainers of, say, £1,000 a year, what difference would it make? You could cut cost from your business as you no longer have the admin burden of the other 300-400 clients and can use the spare time to focus on delivering a real value-added proposition to those who want it, value it and consequently pay for it. I have yet to meet a predominantly fee-based adviser who would go back to commission. Why? Because they are consistently more profitable than their commission counterparts. If the majority of advisers believe the majority of their clients will not pay fees, it does not matter. In most instances, they only need 20 per cent to pay fees on a retainer basis to become more profitable. Given a client bank of 500, there will almost certainly be the potential, with the right proposition explained convincingly, for the adviser to develop the majority of fee- based clients he or she needs from their existing client base. The other 400 clients could be passed or sold on. Alternatively, they could be held in a non-service based transactional business model. But what do clients value? In our research with IFA cli-ents, the key factors they sought included peace of mind, a genuine trusted relationship, a proactive service and the ability to make and or save money. In fact, product and technical expertise were rarely mentioned specifically. These things are important but they are less so than the general approach to service, the quality of the relationship and the overall strat- egic advice. If the client’s focus on value is aligned to things other than product and the adviser’s payment mechanism is aligned to product, then there is a clear mismatch. If you ask any client what they have disliked about consulting an adviser in the past, they will more often than not say that they either felt under pressure to buy something or once they had bought something, they did not hear from their adviser again. This can be a very useful question to ask prospective clients. It enables the adviser to suggest the merits of det-aching the payment mechanism from selling product in favour of the client paying a retainer, thus demonstrating total impartiality, a focus on the bigger picture and ongoing valued service. The fee-based adviser is more likely to consider the merits of giving investments longer to come good, clearing debt with cash deposits rather than investing further in asset- backed investments. They are likely to look more closely at moving money around savings and bank accounts and finding budgetary savings to meet short-term financial aspirations such as buying a car, holidays, etc. This brings with it the ability to market impartiality and a broader service, which gives their client peace of mind, something most cli-ents are willing to pay for. Some may feel this is all well and good Ã¢Â€Â” clients may pay fees but will they pay a fee big enough for me to be able to deliver what they want profitably? That question, along with how a fee-based proposition should be structured, is a topic for ano-ther article which discusses the importance of fixed & value pricing.