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WES is a new form/document-based service to help advisers gather and turn around information in the more complex wealth advice market.


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Move into the profitable wealth market or the 20% of population that controls 80% of the wealth. A series of planning resources and documents to support the practice move into the wealth market. Read more...

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An innovative information service to help advisers move into the ageing market that controls 65% of private wealth - shows the adviser how to manage wealth transfer to the next generation. Read more...


The pricing conversation is often the most feared component of the adviser client interaction. Many advisers prefer to avoid the conversation altogether or present it in “compliance speak”. They start the conversation with “It is a legislative requirement to disclose our fees so here goes”. Most clients have stopped listening when they hear legal mumbo jumbo. They sense that their adviser is becoming defensive, which is a vicious cycle, this makes them re-examine the fees more carefully than they would usually.

In today’s market, the fee conversation requires preparation and can be handled successfully if the adviser changes their own attitude to pricing. Confidence and quiet assertiveness reflects well on the adviser particularly when talking about increased fees.

Market research in Australia indicates that many advisers in the industry undercharge for services. This is one of the reasons why many struggle financially. When FOFA forced the industry to move to a fee for service and away from commissions, the industry lost a huge opportunity to re-evaluate their fees.

Industry funds have pushed down fees (and the perception of what fees should be). These institutions enjoy economies of scale and are able to price very aggressively to win market share. The financial planning industry reacted by lowering fees to remain competitive. The recommended approach would have been establishing a substantial point of difference, instead,  to ensure client retention.


Adviser Mindset

The adviser mindset has been transactional and a move is required to view themselves less as salespeople and more as educated advice professionals.

A planner often uses their value framework when engaging with clients.  Making assumptions about what a client is willing and prepared to pay for a service can result in errors of judgement. It is recommended that market testing is used prior to setting prices. For example, a client that drives a 6 figure car, lives in a 7 figure house spends $ 4-5,000 on utility bills. When a planner sets fees of $ 5000, they equate the advice fees to that of their phone bill. The service is then undervalued by the client. In some instances, clients may in fact be willing to pay more than double the fee quoted.

A fear of rejection is very human emotion and one which plagues advisers. They believe if they charge a premium fee, their service will be rejected. Society dictates that it is impolite to openly discuss money – and those that do are generally looked down upon. Commissions used to provide an easy way out for most of the planners to get past a delicate subject. FOFA has enforced change and some are now using low fees as part of their avoidance strategy of dealing with the change.

The reality from the client perspective may be quite different to adviser perception. Take the example of a US based planner who raised her fees for 64 of her top clients and only lost 3. She believes that this is because she should have prepared more carefully and listened more closely to these 3 clients and she would have retained them as well.

Practices have become price takers, preferring to be market led when setting fees, rather than evaluating the quality of their offer and putting a price on it.  Many do not use business breakeven calculations when developing pricing strategy. We speak to advisers that charge $225 per hour. They do not include all expenses and a reasonable profit margin when setting this hourly rate. A good starting point for fees is to engage an accountant to do a breakeven budget and use this as the basis of service pricing.


Client Mindset

According to buyer behaviour research, there are 3 types of clients in the market:

  1. The value buyer - that buys on the quality of the relational experience.
  2. The discount buyer - who will buy on price.
  3. Swingers - that alternate between value and price depending on the quality of your offer. The key is to attract and retain value clients and prospects and a reasonable proportion of the swingers. There is inconsequential benefit in attracting and retaining the discount buyer, as this does not make for a defendable business model.

As ASIC shadow shopping study done in 2012, examined financial plans for retirement age clients. The results were:

ü  Only 3 % of the 64 plans examined had high quality financial advice.

ü  However 86% of these clients believed that they had received good advice and 81% trusted the advice.

Clients themselves are not always objective about the quality of advice they receive. Their judgement is impacted by the relationship they have with the adviser. We do not recommend that you ever provide anything other than the highest quality advice. However, note that clients put a premium on the quality of the relationship they have with you, so the fees that they are willing to pay is directly proportional to the empathy developed with the client.


The Golden Rules of Adviser Pricing

  1. Start with a breakeven budget when calculating pricing.
  2. Take the adviser’s value system out of the pricing strategy.
  3. Seek out value buyers and prospects plus some of the swingers.
  4. Manage the fear of rejection
  5. Identify markets that can afford to pay for services
  6. Deliver value, not just product
  7. Review pricing regularly to market trends
  8. Assume the pricing is right. Discuss it only if the client makes it an issue.
  9. Price your service to make a profit after your drawings.

It is recommended that whilst advisers need to work within the compliance framework of their dealer group, an adviser should not lay undue emphasis on pricing during the client conversation. In other words, pricing is only an issue if the client has a genuine need to discuss this further.

The adviser conversation needs to be structured around the strategic points of difference and service offer.

If the breakeven pricing budget is done correctly, there should be no problems with the conviction in adviser pricing.





We welcome your suggestions and opinions on pricing. Call on 1300378752 or This email address is being protected from spambots. You need JavaScript enabled to view it.