Trending
Whether we like it or not there is always the possibility of fee resistance in delivering financial advice, and how we present our service is a large part of that problem. Price is always a problem in the absence of obvious value. It doesn’t have to be…we just need to think through the differences between “what we say” and “what they hear”.
I often hear planners and advisers describing their role and work as being something along the lines of “a thorough and professional planning process focussed and then considering the risks, potential strategies and cashflow implications with a view identifying the clients goals, and recommending the best strategy for trying to achieve them“. It may be more eloquently expressed, but this is the essential description of what the financial plan is all about. And then we put a price tag on it. Perhaps we even show them a sample of the work we have done for other clients, and mildly impress them with the range of colours we have in our pie charts in the 40 page plan.
But what does the customer hear?
If we look at it from their perspective our comprehensive advice process sounded like this:
“This financial planning thing is going to cost me $3,000 (say), and for that I will get a report that tells me what I’m thinking and what I want, and will give me suggestions on how to get it? Why would I pay someone to tell me what I already know I am thinking and wanting? And $3,000 (say) sounds like a lot for a heap of paper and pie charts I don’t want to read”
And so, we have fee – or price – resistance.
The resistance is there not because the number is too high, or even necessarily unaffordable, but because there is no link in the customers mind to the value they will obtain for that fee.
With all of the focus in recent years on technical content and learning, together with higher standards of client care and thorough documentation, and having all that supported by evidence and research, there is no doubt that planners are usually delivering better quality advice than ever before. But the planners themselves are captivated by how clever the process is and think that in itself is a valuable thing.
That is going to be pretty tough to sell to most consumers.
Of course, WE know that the consumers don’t actually know how to plan to achieve the goals and mitigate the risks along the way usually. We also know that they don’t generally engage in adequate research or consider a range of strategies and tactics to determine the optimal path. We know that a lack of objectivity leads to irrational decisions and behaviour, and that irrationality will often be enough to derail anyone.
But we can’t tell them that. Because what they will hear is:
“you’re telling me I’m too dumb to do it myself? Good luck finding a client pal, because it isn’t going to be me….”
If we go down that path we will have price resistance combined with active dislike of the adviser and the advisers message. Hardly a recipe for engaging new clients, is it?
There are essentially two courses of action if we want clients to engage, and break down the barriers:
- Position the offer differently.
- Break down the service into palatable pieces.
I’ve written recently about breaking the plan down into palatable pieces so I won’t repeat myself on that topic. The big one of course for this article is the first point: positioning what we do.
In terms of positioning the offer differently we need to move away from describing our process and professional conduct, and zero in on what the consumer actually cares about. We also need to couch the language in such a way that it creates the intrigue or desire because there is an immediate sense of value. Perhaps:
“For $3,000 I figure out how people can realistically have the life they deserve – and how to get it sooner than they usually believed possible”
Think about that positioning. Without introducing the magic of our process and prowess we just described exactly what it is we do for people, and in such a way that the price seems very fair indeed. And what we are saying is very very likely to be exactly what they want to hear now….
Who wouldn’t pay $3,000 (or whatever the planning fee is) to unlock the secret of how to get the life they want?
More importantly, who wouldn’t pay $3,000 to get there years quicker and get out of the rat race, or off the corporate treadmill, or whatever else it is that they perceive as “the limitation”?
Talk about how you remove the limitation from their life…get them the life they are imagining sooner than they think they can…that’s empowering and liberating and something that people will place a premium value upon.
Related: How to Balance Client Time With Practice Development