Charging Fees For Providing Financial Services

A service can be defined as assistance or advice given to customers during and after the sale of goods.

That sounds like what you’re doing in your career as a financial advisor, doesn’t it?

Here at Consolidated Planning, our goal is to provide you with a clear path towards continually building your practice. We are firm believers in providing a mix of support and autonomy in developing our advisors to be the best they can be. Becoming the best advisor you can be requires constant reevaluation of where you want to go from where you stand today.

And at this point, you may have found yourself teetering on if you should charge a fee for your services so we’re glad you’re here. We’re going to help you discover the benefits of charging fees for both you and your clients as well as a few methods for implementation, all to decide if charging fees is right for your practice.

 

Should You Consider Charging Fees In Your Financial Practice?

In every industry there are people being paid for selling objects. Objects. 

The value add of working with you, a financial advisor, is the advice you’re providing. This advice is to help people have a better relationship with their money in both the short term and long term.

Don’t you want to be compensated for the most valuable part of the work you’re doing for your client?

Maybe you do.

Or maybe you’re still unsure about what your clients will think of you charging fees. Let’s look at what charging fees might look like for your clients.

 

REASON #1 PEOPLE EXPECT TO PAY FOR A SERVICE

Think of all the services you pay for. Whether these services are personal or professional, there are a lot, aren’t there?

And people expect to pay for these services.

So, why should your financial advising services be any different? 

As a financial advisor you are, more or less, selling advice. While advice isn’t technically tangible, it’s arguably much more valuable than any tangible object that people are being paid to sell.

When people understand the value they can receive from their financial advisor – the specialized knowledge and experience, they are most likely willing to pay for that experience.

In fact, your clients might have more faith in their financial advising process, knowing that you’re being as up front with cost as possible.

 

REASON #2 PROVIDES CLARITY AND TRANSPARENCY

We’ve all heard the elephant in the room idiom. Oftentimes a common elephant in the room is around dollars. 

• How much does someone charge? 
• Are there any hidden fees? 
• Is the service worth the cost? 
• Will the cost reflect the level of service?

Well, charging fees and making that known addresses that elephant in the room.

How’s that?

Charging a fee helps you to set clear objectives with your clients from the start. This helps them better understand how you’re being paid and what that looks like for them throughout the process.

Alignment when it comes to cost, can help you and your client sit on the same side of the table, both figuratively and literally. No one is waiting for the other shoe to drop.

This allows you to focus on providing your clients with solutions and does two things:

• Removes pressure off your client to make a quick decision on the moving assets and getting everything set up with you
• Compensates you for the process of finding the right solution for your client, even if that means there is a lot of back and forth finding it

In any client-advisor relationship, transparency and clarity should be of utmost importance. Transparency and clarity here will help further advance the client-advisor relationship by building the necessary trust for a long-term relationship.

Clearly setting expectations when it comes to fees allows both parties to breathe a little easier.

 

Reason #3 MAKES YOU MORE REFERABLE

In this age of information, ambiguity is a problem. 

People want to know what a service costs. And they want to know now.

If the cost of your service isn’t disclosed, people will always assume it’s higher than they can afford. While it’s possible this is true for some, this helps them make an informed decision rather than one based on assumptions.

After all, if you hope to follow our ideal work week in a day in the life of a financial advisor, you’ll need 15 varying appointments set each week. Wouldn’t you prefer if someone was able to deselect themselves from a meeting before taking up a spot on your calendar?

With that being said, charging fees for your services can make you a more referable advisor by removing the question marks around cost. This removes barriers and makes it easier for people to make decisions when it comes to your services because:

• They know how you get paid
• They know what it costs to work with you

Since quality referrals are part of your livelihood as a financial advisor, you’ll be glad you shared your costs up front.

 

How Will You Charge Fees In Your Financial Advising Practice?

Just like a planning case, there isn’t a one size fits all fee structure. 

Or at least there shouldn’t be.

Determining your methods will depend on various factors, such as the nature and scope of your services, the complexity of your clients’ financial situations, and the competitive landscape in your market.

#1 FLAT FEE 

A flat fee is typically for a consultation, a one time assessment, or a specific project. With a flat fee there is a defined start and end date with clear milestones being delivered to the client.

#2 HOURLY FEE

As a financial advisor, you know that a lot of hours can be poured into some planning cases. An hourly fee covers you for the hours you’re working within a portfolio. Here you track your hours and charge your fee based on what it took to complete the project at hand.

#3 SUBSCRIPTION-BASED FEE

A subscription-based fee is a recurring, ongoing cost. This ongoing fee is typically an annual fee charged on a monthly basis based on your monthly output for a case.

This is ideal for developing long-term relationships due to the level of support, including:

• Periodic check-ins and advice
• Quarterly or annual meetings
• Customized investment advice
• Access to additional resources and tools.

The goal of implementing fees is to make this as seamless as possible for your clients. In order to do so, it’s essential for you to properly articulate why you’re starting to charge fees and what that will look like for both new and existing clients.

 

Is Charging Fees Right For Your Financial Advising Career?

Delivering real, meaningful solutions for your clients can take time.

And your time is valuable as a financial advisor.

But even though charging fees is quickly becoming the industry standard, it doesn’t necessarily mean it will be right for your practice. Ask yourself these questions:

• What will your client’s perception be if you charge fees?
• Will charging fees help you become more or less competitive with other financial advisors within your market?
• How will you develop your fee structure and implement any adjustments in the future?

The truth is, charging fees will help you to continue growing a successful and sustainable financial advising practice that puts your clients’ interests first while protecting your most valuable asset, your time.

If you’re interested in learning more about charging fees and how you will be compensated at Consolidated Planning, reach out to our team of recruiters.

 

2023-153798 Exp. 4/2025