I Don’t Have the Guts to Raise My Fees
Beverly Flaxington is a practice management consultant. She answers questions from advisors facing human resource issues. To submit yours, email us here.
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I attended a session you did at a conference a while ago on how to talk about fees with clients. Some of the things you shared about how people view costs and how advisors undervalue themselves resonated with me. But the topic that made a difference was having confidence – in myself as an advisor, in the value I provide and in the way I can shift a client’s life experiences.
I changed the way I talk to prospects about what we do and how we do it. It’s been a winning strategy. I no longer negotiate fees; I stick to my fee schedule and charge what I believe I am worth.
The problem is with existing clients. I have had many cases where fear led me to reduce a fee quite substantially in the past. When I was worried about losing a prospect, I would offer a price break to get the person in the door. I have several legacy clients who are not large (I target clients in the $250k-$1.5 million range) and they are killing my practice. The fees are almost laughable when you look at what they pay me each year and the amount of work I put into their accounts. Some days I wish I could fire everyone under $250k and some who are bigger but pay me next to nothing. But that isn’t realistic. I know their stories, their family situations and in many cases we have developed friendships.