I would like to take the pricing debate to the next level. With the backing of Money Marketing, I am proposing a reader competition to demonstrate what it is advisers actually do for their clients, how they price their services and how they add value to their client’s lives.
My idea is for readers to write and submit an engagement letter setting out all of the above based on the following case study.
The case study
Paul and Kim have approached you as a respected local adviser. They want to establish if it is possible for them to retire now. They have various financial arrangements in place briefly described below.
Paul is 59 and Kim is 58. They are both in good health.
Both have deferred final salary pension schemes payable from age 65. They wonder if they should take the benefits now either in the form of a full pension or a reduced pension plus a tax-free cash lump sum. Paul has a Sipp he has self managed over the years and Kim has a personal pension plan part of a group arrangement through her current employer.
They have recently received a substantial inheritance which is currently in a bank account earning no interest at all.
They have both saved in stocks and shares Isas and have a small portfolio of direct shares.
They own their own home which has a very small outstanding mortgage.
Their two children Alan and Emma are grown up and financially independent. If possible Paul and Kim would like to help with the cost of private education for their grandchildren.
Paul and Kim are ready, willing and able to complete your fact-find and risk profile questionnaire. They will also let you have the spreadsheet they use to manage their expenditure.
Their goals and objectives are primarily the ability to retire now and have the retirement lifestyle that they want and to assist with education costs for their grandchildren.
You will notice there are no numbers in this short case study. The challenge is to write an engagement letter setting out in detail;
- what it is that you will do for them (your proposition)
- detailing how much you will charge (for advice, implementation of any solutions and any review service you offer)
- explaining why your services will be of value to them
The winner will be the writer of the engagement letter who in the opinion of the judges best explains the link between price and value in their proposition.
The judges will include an expert panel of advisers (including myself) and Money Marketing commentators, who will pay particular attention to clarity, transparency and detail. The best entries will be ones that are clear and concise.
Details of the winner will be revealed by Money Marketing over the coming weeks.
Please email your entry to firstname.lastname@example.org
Nick Bamford is executive director at Informed Choice