Adviser Charging – Identifying the Value

Having met and worked with a number of adviser firms, I often get asked how other advisers charge.

My response is always the same, “What does it cost you to turn the lights on?”  Many advisers don’t know what it costs them to simply come into work every day and it is a very useful exercise to use as a basis for your charging structure.

Once you know what it costs you “to turn the lights on” you can then divide that by the number of clients you have or want.  This then provides you with a basis to start your charging structure.

The next problem advisers face is recognising their own value.

Would you take the engine out of your car to give it a thorough overhaul?  Most of you would answer no, why? because you don’t have the expertise and the knowledge to be able to do it.

The same applies to pensions and investments; you expect to pay a premium for experts that can steer you in the right direction.

Whilst I am not a fan of % fees, I recognise why advisers are.  The problem I believe lies in explaining what you are going to do for this fee to the client.

The value that you add has to be recognised by the client and it is sometimes this that creates the issue because advisers don’t explicitly make clients aware of not only the money that they have made them, but also the money that they have saved them.

My favourite example of this is telling a client with a potential IHT liability that by utilising their £3,000 annual gift allowance they can save their estate £1,200.


Rather than putting money into an ISA, put it into a pension and instantly get up to a 45% return, not to mention any fund selection alpha that may be added.

The other issue I find advisers have is communicating what they do for their ongoing fee.  These are the things that you do every day, you just don’t document.

Things such as:

  1. Maintaining your clients file
  2. Communicating changes of circumstances
  3. Communicating legislation changes and implement actions that may stem from it
  4. Utilising annual ISA, CGT and Gift allowances
  5. Annual review preparation and review
  6. Portfolio monitoring
  7. Platform Due diligence
  8. Lifetime Allowance monitoring
  9. Annual Allowance monitoring
  10. Carrying out your annual CPD and keeping up to date with changes
  11. Newsletters
  12. Adhoc communication – ongoing access
  13. Gift register
  14. Assisting family in the event of death
  15. Keeping abreast of the global economy
  16. Monitoring client goals

I am sure there are many more that I have missed, but all of these components add value to your client proposition.

We at Plan Works can help you implement a charging strategy to identify  the “in-house” tasks you are not communicating to your clients. This will ensure your client recognise the value you bring.



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