Are Wealthy Prospects Paying Their Financial Advisor Too Much and Receiving Too Little?

Prospects don't know what they don't know

Let's face it, you have to deliver more value than ever before to compete with ideal prospects. You have to have a solid value promise, lower cost, and comprehensive advice and planning as part of your deliverables. You know that ideal prospects are not getting what you deliver, yet they stay with their advisor. Why? Is it because of relationship? is it because they don't know how to fire their advisor? or is it that they don't know what they don't know? They don't know what they have paid and got and not got from their advisor. In other words, they don't know what they don't know. They don't know how much it is costing them annually to stay with their current advisor in fees. they don't know the probability of success and how much more they could be enjoying, at the cost of their current advisor relationship. They don't know that with solid financial and tax planning they may be able to retire earlier, enjoy life more, and accomplish more. They don't know what they don't know. How do you let them know? How do you show them how to have a higher probability of success? How many ways do you stress test their planning or portfolio to show them, with the same money how much better they could be? How much have they paid their advisor in total over the last ten years? Do a fee audit that shows them how much they have paid over the last 10 years in fees and more importantly, what they have for those fees such as a comprehensive wealth management plan. 

Do you offer fee audits? 

Do your ideal clients know all the services that you offer? Imagine walking into a restaurant, and after getting seated, the host rips the menu in half and says” enjoy your meal”. Do you want the whole menu or just half of it? Your ideal clients, which are your best clients want the whole menu. They delegate everything to you and are “all in” when it comes to comprehensive planning and advice. The clients who only want to use part of your services are NEVER going to be your ideal clients, so stop hoping they become one someday.

Ideal Clients Delegate

Imagine having two doctors you trust that compete with one another, one doctor for the top half of my body and one doctor for the bottom half. Sounds crazy to most, yet so many advisors accept the fact people have two financial advisors. People want to find someone they ultimately trust, and if they cannot ultimately trust you, they never will be ideal. When they trust you, they want to know all your services. So, do you have a checklist of comprehensive services in the seven key areas of planning? The seven areas are tax, estate, risk management, insurance, investment, cash flow, and debt. Are you doing comprehensive planning and comprehensive advice in all seven areas, with an internal or external team or network? It is difficult to know all seven areas and stay on top of it, that is why you need to put a comprehensive team around your best clients to deliver. Once you have the process, then plan on articulating it with a checklist of all the services you deliver and what I get in each of the seven areas to achieve my goals as an ideal client of yours. I have several great samples of a comprehensive checklist of services. Check out what a family office does for comprehensive planning and advice services and consider creating a “mini- family office of services”.

Do a Fee Audit

Do investors understand the total cost of investing and advice? Consider completing a fee audit on a wealthy prospect's portfolio and financial plan. Over the last ten years, look at the total amount of fees they paid and look at the tangible (dollar gains, tax planning gains, estate planning gains, advice gains) benefits they received. Then list the intangible benefits they received, such as peace of mind, comfort, simplicity, and trust. This can be part of your detailed process to outline your measurable and immeasurable client benefits to prospects

Use a Checklist of Benefits to Compare What They are Currently Getting and Not Getting, to Help Your Wealthy prospects Understand What They Are Paying For

Make sure they understand the total cost, in dollar terms, and percentages by highlighting it at the bottom of the fee audit checklist page. One of the services can be a beneficiary audit. When was the last time a client or prospect walked into your office and asked for an estate plan? The reason why people don’t ask for one is that they need deeper clarity around their specific goals for their estate. Instead, ask this question. “Did you know about our beneficiary audit service? “The typical answer is no, what is that about? “Would it be valuable to do a beneficiary audit, to summarize on one page all your beneficiaries and the benefits they will receive, and make sure all beneficiaries are correct and coordinated with your will? If we could summarize this information on one page, would that be valuable to you? To get your 11-page report and create your fee audit checklist for ideal prospects click here to download a copy https://feeaudit.getresponsepages.com/ 

Show Prospects What They Are NOT Getting

When you sit down with wealthy prospects, consider this exercise and discussion. Ask “Can I do a fee audit for you to help you understand how fees impact your planning and the total cost in dollars and percentages? Would it be valuable for you to understand the total cost of what you are paying, what you get for those fees, and what you do not get? “Look at the estimated total fees over the last five years that they have paid and quantify them in a dollar-cost as well as a percentage. With a prospect, look at the starting investment amount five years ago and the ending investment amount today, including withdrawals. Then ask about the planning processes they have completed, including tax planning, estate planning, and financial planning, and ask to see the documents. This exercise will help you with your value discussion, but more importantly, show prospects the total cost, in dollars and percentages, and help them understand the total that they are paying. It will also show complete transparency with benefits and will show your prospect instant and tangible benefits of working with you, especially if their current advisor has no process for showing their planning processes, total fees, and total transparency if they show any fees for advice. It will also allow you to discuss the value of your planning processes and your progress update meetings to keep them on track.

Key Prospecting Discussion

Get in a habit of people you come across every day if they understand the fees they are paying. Ask them to explain the fees as they understand it. Then ask” would you be open for me to do a fee audit for the last five years to help you understand the cost (or fees) and benefits? I ask because we do this for our clients, so they understand the measurable benefits of our advice along with the immeasurable benefits that our planning offers such as peace of mind and simplicity of their financial life. Our clients appreciate more comprehensive planning advice through our comprehensive checklist of services. Would you like to see a copy of our checklist? Our clients have comfort knowing we have a comprehensive process that ensures you are taken care of, so they can go on and enjoy the things that are important to them”. Now you have the start of a process to discuss your differences with prospects.

Practice Makes Perfect

Do you have scripts that you use with prospects and practice them with someone to give you feedback? Do you have a clear detailed process for making your client’s fee ready? If not, who is helping you and who has a proven process to help you get there? Find someone who has a proven process and has the time to help you get there. It is not just about content, but it is about practice. Who is helping you practice your scripts? Do you record your practice sessions? Imagine if the “Rolling Stones” band never practiced and only recorded once? Do you record your meetings with your client’s permission? Find a coach, mentor, or manager who can help you build your process and help you practice your communication skills to articulate your value. Now go out and practice your fee audit conversation, build your process for converting prospects, and provide measurable and immeasurable value to your new clients.

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