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Fees or bust

The news that Marks & Spencer has dropped its differential pricing on bigger bras got me thinking, after all, the idea of prices based on the item and not its contents (build contents that is) takes me to the most important part of the move to fees.

In my own practice, we have been using timesheets for almost four years. It is often seen as a bind at first but without them you can never really determine the cost of advice delivery and implementation and far less the cost of ongoing reviews.

It is often questioned if high-quality, high-touch advice is scalable. I think it is, but, to get there, processes are essential. To work as artisans removes any hope of brand value and reduces the firms’ value at the same time. Far too many of us take on clients who are not able to produce the level of revenue needed to provide them with our normal level of service.

The public have lost their trust in banks and we have an opportunity to step into the place previously held by the private banks. We cannot afford to subsidise the Government by advising individuals where personal accounts will be their main source of income. Some will say these people may fit our criteria one day, fine, let’s cultivate them then, not now.

Time/cost information can move even the most ardent whole-market fans to the place where we moved to some time ago.

We must remember clients we attract on this new basis need to be housetrained, as does our own team. The clients need to understand that if they add to time they add to cost. There is a world of a difference between giving professional advice and moving products.

To make any change, and I don’t mean all this new model stuff (the new model that forgot about market falls), we need to create the right culture in our firms.

To do so, leverage the intellect you have in your own staff. None of us has all the answers and we cannot have all the interaction with our clients, so if you do not do so already, start to have regular meetings with all of your team and not just those who advise.

In the same mould (no pun intended) of the bigger busts’ campaign, we need to continue to build the argument as to the value of advice. We must all recognise that doing the same thing many different ways is not just inefficient but also increases the risk of giving advice exponentially. The IFA brand is increasingly being dropped by firms similar to ours. It is not sensible to align with a brand where the range of competence and quality is so vast.

If we do not recognise these truths, we deserve to go bust. As is often said, size is not everything.

Robert Reid is principal of Syndaxi Financial Planning

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