I was interested to read Julian Stevens’ letter in the January 24 issue of Money Marketing, essentially relating how he was unprepared to deal with an assertive client seeking to negotiate costs downward.
I believe this will become more common as CAR allows clients to engage with the idea of adviser remuneration.
While I will understand if the first time this happens to an adviser it might feel bruising or uncomfortable, please consider the position from the client’s point of view. When they deal with a plumber or electrician, they can negotiate, so why not with an adviser? If I were in the client’s shoes, I certainly would want to.
Julian Stevens deserves much credit for being so candid, first admitting that he was caught unprepared and, second, saying that he stood his ground in his subsequent letter to the client by standing by his charges and justifying them and potentially losing the client.
The issue for the client then becomes focused on the value they associate with the service and whether they want to pay for that (which is where it should always have been focused).
Advisers will have to be prepared to draw a line and only conduct business on financially sustainable terms, which ultimately means turning some potential clients away. Like it or lump it, this is I believe a glimpse of the future for adviser/ client relationships.
Dr Robin Keyte
Towers of Taunton (Financial Services) Taunton, Somerset