Can you differentiate your best clients from your worst? I will give you a clue: the best ones pay. It sounds obvious but last year I chaired a seminar for Money Marketing and afterwards a number of business owners called me to discuss the problems they were still having in terms of getting paid realistic fees post-RDR.
Recurrent themes were consultants wanting to cut fees (but not their own pay) to get a piece of business, and timewasters. Businesses with the former problem have either an overcharging issue, a training issue or both. To deal with the latter I have evolved my own set of rules.
Firstly, we no longer routinely offer a “free” first meeting at a client’s home. Where business clients are concerned, plenty want an adviser to spend a couple of hours explaining automatic enrolment but most then DIY it. With this in mind, business owners wanting our advice on auto enrolment pay for all meetings, including the first, or we decline.
For private clients, we now charge a home consultation fee if a distant prospect wants a first meeting where they live, even if they are existing client referrals. If they are serious about doing business they will either come to us or commit to the home visit fee. If not, why would I waste my time on a 400-mile round trip?
“Haggling is not a part of our culture. We do not start with a high quote and then reduce the price; we price it right first time”
We also refuse to work on the promise of “jam tomorrow”. Frequently we have been asked to do something for free on the promise of lucrative business later, which never in reality materialises. We were once approached by a firm wanting us to set up a designated stakeholder scheme; however, they were not planning to pay any employers’ contributions and did not want to pay us either.
Instead the directors reckoned they would be using us for million-pound co-shareholder policies at some indeterminate date in the future, so we would earn a commission that way. I happened to know we were at least the third firm they had tried this ploy on so countered by saying we would be glad to set our fee against the commission when they eventually did their cover. We are still awaiting their call.
We absolutely do not negotiate on fees. We have worked out a scale that is fair and competitive so why would we work for less? Haggling is not a part of our culture. We do not start with a high quote and then reduce the price; we price it right first time so our first price is our only price.
If anyone reading this is tempted to say it cannot be done I refer them to the plaque on my office wall quoting the old Chinese proverb: “He who says it cannot be done should not interrupt the person doing it.” For this I have the RDR to thank. Pre-RDR I ran myself ragged for timewasters. The RDR made me look hard at what we did and how we charged. I still work as hard as ever but only for paying clients.
Neil Liversidge is managing director of West Riding Personal Financial Solutions