How do you set your fee when so much of what you offer your clients is intangible?

Financial Advisory

James Goad

Back OfficeBehavioursData ScienceExperienceFinancial AdvisoryRiskSegementationWinning Advisers

As you seek to build a sustainable business for the future, you have to calculate how your advice charges should be structured, justify your fees and ensure the service being charged for is being delivered.


  • There is no right fee structure, just one that works for your business.
  • There are a variety of charging structures all of which have pros and cons.
  • Many of the intangibles can be bought to life by the use of lifetime cash flow planning.
  • There are four key differentiators - products, distribution methods, different levels of service, different range of services.
  • Know how you compete i.e. is it on price? are you a generalist or a specialist?
  • 1% ongoing potentially under threat.
  • Know the cost of taking on a client.
  • Trust, peace of mind and continuity of relationship is key.
  • There must be consistency of the charging structure through your business.
  • Value yourself.

Key issues and challenges:

  • Costs of running an advisory business are increasing and there is a possible downward pressure on fees.
  • Certain charging structures will put advice out of reach of more people.
  • If contingent charging isn’t right for DB transfers why is it right for other forms of business?
  • Charging a fee for a plan and then implementation needs careful thought as if it costs more for implementation then advice it undermines the value of the advice.
  • If your charging structure contains too many aspects it is confusing for clients.
  • Should you also express a flat fee as a percentage?
  • As the client demographic shifts you are possibly dealing with 3 different generations in the near future. How does your proposition and its delivery fit in?
  • Believe in your worth/value. If you don’t your clients and staff won’t.
  • Should you put a cap on your charges for larger clients?
  • Migrating existing book to a new charging structure.
  • Quoting a menu approach could be difficult under MiFID II.
  • Communicating the intangibles especially to new clients.
  • Is your pricing structure delivering the results you expect?
  • Not getting paid for work purely on a contingency basis
  • Currently clients are ok paying for advice/services but concerns are Millennials wanting everything for free.
  • Don’t make your structure too complex and make sure you can collect it easily.
  • Sometimes the business has to ‘sell’ itself especially if it is in a beauty parade and we may not be that good at this.

Conclusions and solutions:

  • Establish a fee structure that is right for your business.
  • Accept that trust and other aspects are intangible and can’t be measured but are highly valued by the client.
  • Work to a plan that makes the clients’ money mean something to them as this makes what you do more tangible.
  • A lifetime cash flow plan helps bring the intangibles to life.
  • Cash flow modelling is key. Very difficult to advise a client without it.
  • Make sure you provide your clients with useful, accessible information.
  • Your charging structure should be sense checked to see if it is delivering the income/profits you expect and that you understand associated costs of taking on new clients.
  • Review your touch points with clients to establish if you are in their view on a regular basis.
  • Look at how you deliver your services and do you need to be more digital?
  • Don’t give discounts in inappropriate places. Better to turn a potential client away than discount your fees.
  • Believe in yourself and place the correct value on your offering.

Expert: Nick Bamford - Informed Choice, Tony Bray - threesixty, Alistair Callander - The Private Office, Gabriel Crayford - The Private Office
Facilitator: Martyn Laverick - Soprano Consulting