Kitces & Carl Ep 98: Fee Schedule Complexity And Managing The Fear Of Leaving Opportunities On The Table

Kitces & Carl Ep 98: Fee Schedule Complexity And Managing The Fear Of Leaving Opportunities On The Table

For many financial advisors, prospecting efforts have traditionally been based on a perspective of scarcity, where the aim was to focus on connecting with and closing as many prospects as possible, regardless of their actual needs. However, in order to accommodate a wide range of clients with wildly diverse needs, firms often need to provide a myriad of services to address those needs. And this can mean developing a fee schedule with so many layers of complexity – to price out the range of all the services offered – that many prospects often end out too confused to understand what the advisor can actually do for them.

In our 98th episode of Kitces & Carl, Michael Kitces and client communication expert Carl Richards discuss how a scarcity perspective can result in a firm’s loss of focus by trying to accommodate any and all clients regardless of their needs. Instead, by conveying a clear and simple message to clients about how the advisor’s value can provide for a very specific type of client and their unique needs, advisors can enhance their business growth by attracting the right type of client while investing less time and fewer resources actively seeking out new prospects.

As a starting point, it’s important to understand that as the financial services industry has evolved into the digital age, it has become increasingly common for financial advisors to rely on web-based business development strategies where the typical number of ‘prospects’ who visit the advisor’s website are often astronomically large. Which means that nearly all advisors who have a website no longer have a shortage of prospects (as they can often rely on organic web traffic alone to bring thousands of visitors to their site); instead, the challenge has become one of attracting the right kind of prospect. And offering a message that will compel even just a small fraction of site visitors to engage in a relationship can lead to a substantial increase in business.

As individuals increasingly rely on the internet to find the right services to meet their needs, more clients are also seeking and engaging with advisors digitally. Which means that understanding the nature of how those visitors use and relate to their website (through website data analytics tools) can give advisors the tools to assess the efficacy of their marketing efforts. Some useful metrics to help advisors understand their visitors include the number of users and visitors, where they look for information, and session length. And monitoring these metrics over time can help the advisor ensure that their messaging is truly offering a clear, meaningful, and relevant value proposition to prospects.

Ultimately, the key point is that trying to cater to all clients out of fear of leaving opportunities on the table – and developing complex fee schedules to meet all of those clients’ needs – will generally only serve to dilute an advisor’s value proposition. But by recognizing that firms already have access to a wealth of prospects through their website, advisors can home in on attracting the right kind of prospects to grow the business without losing the focus of the firm!

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