Getting Flat Fees Right

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No fee model is 100% free of conflict, but retainer or flat fees are close to achieving that goal – and are very popular. Yet it is hard to make both the advisor and client equally happy. How do advisors set this up in a way that sustains their practice in alignment with the value they provide, yet charges the client fairly?

The most likely outcome of flat-fee relationships

Here’s some real talk about how flat fees generally end up.

A flat fee rarely works perfectly for both sides. Here are the most two common outcomes:

  1. Client pays flat fee and doesn’t consume services commensurate to the value the advisor provides (easy money); or
  1. Advisor receives flat fee and then delivers more than what he or she is compensated for (slave).

It’s reality.

There’s no saying that either #1 or #2 prevail throughout the entire relationship. They will switch off. There are times when the client is too busy to reap the full benefit of what the advisor provides and you’re making easy money. Now let’s say that client is going through a nasty divorce. All of a sudden the situation shifts to #2 where you’re a slave to the flat fee, wishing you had included another “0” on the end of the amount you stipulated in the agreement.