I rarely respond to articles in the trade press but felt compelled to add my views to an excellent article by Nic Cicutti: Selling the concept of charging fees that was in Breaking News in Money Marketing on 2 September 2011.
He starts “Whenever I speak to IFAs about what it will be like to enter the new post-commission world after 2012, they either exude great confidence about the prospect or they tell me it will never work. The key stumbling block is one of persuading clients who, in almost any other circumstance, would have no objection whatsoever to paying a fee for someone’s services that they should do so for an IFA’s advice.” My experience does differ from many of the responses to Nic’s article that clients will not pay a fee for independent financial planning advice.
I started my independent fee based advisory practice in 2006 from scratch with most of my clients finding me via the internet or through word of mouth. During this time, my clients never seem to have had a problem with me charging fees and indeed most of them have signed up precisely because I was fee based!
I am the first to admit that I am not the best salesman in the world but I have nevertheless built up a successful business. I think that the key for me has been being able to explain to clients where the real value in a client adviser relationship lies and having a clear on-going service proposition such as my independent financial planning service.
Also acting as the clients most trusted adviser is much more credible when remuneration doesn’t come from product sales (commission) but from fees agreed in advance with the client alongside being a chartered financial planner.