“34 ways to be a better advisor” is eligible for CE credits. See Accreditation details for more information.

Course summary: The authors identify 34 concrete, detailed strategies to improve client relationships, perform better discovery and give better advice.

SECTION ONE: 10 steps to making the fee conversation resonate

“The single biggest problem in communication is the illusion that it has taken place.” – George Bernard Shaw

Client Relationship Model Phase 2 (CRM2) and new regulations from the Canadian Securities Administrators mean the cost of advice and personal rates of return will be put under the microscope for Canadian investors. For some, this information will be a real eye-opener.

Multiple polls have shown that Canadians don’t understand how advisors are paid. For instance, a 2016 Tangerine Bank study found that 36% of Canadians think they don’t pay investment fees.

There’s no getting around it – many investors still think investment advice is free. And while most advisors have had conversations with their clients about investment costs, that information doesn’t always register, and even if it does, investors can find it confusing. Open, transparent conversations around fees and value can be challenging, but there are effective communication strategies you can use as we enter a new era of fee-disclosed financial advice.

10 steps for a successful value and fee conversation

Using research and best practices from top advisors, we’ve created a process to help you conduct conversations that resonate with your clients. This includes critical steps to ensure your clients understand the impact of your advice, as investment costs are only an issue in the absence of value. For your top clients, we recommend scheduling face-to-face meetings to tackle this discussion in person.

The value and fee conversation process


1. Start with a well-positioned opening statement.

This is not as simple as it sounds. Your statement should be well thought out, memorable and succinct. Clients don’t want to hear a cookie-cutter script, so authenticity is critical.

Example: “As you know, I do everything possible to ensure my clients are well-informed and confident about our investment process. Today, I’d like to speak to you about changes we’ve made to serve you better. I want to make certain you understand the costs associated with investing and I’ll outline the services you’re receiving for the fees you’re paying.”

2. Highlight the changes.

Draw your clients’ attention to what will be different on their reports, how it impacts them and when they’ll see the changes.

Example: “In January 2017*, we will be launching new reports which help us provide full disclosure to our clients. You will see clearly how your investments are performing as well as a breakdown of the costs you’re paying, in actual dollar amounts.”

*Use the date when your clients will be receiving their first Annual Charges and Compensation Report and Performance Report in the new fully disclosed format.

3. Explain your approach to wealth (your philosophy).

Remind existing clients of what you do by providing your definition of wealth management. Take time to craft this message – it summarizes your value and forms part of your personal brand. Include your unique skills and services, and examples of how you’ve helped clients achieve their goals.

For instance, you could provide a marketing piece like the one below:

What is true wealth all about?

4. Re-visit your process.

Outline the process you follow when working with clients. Below is an example of a process for creating and monitoring a customized wealth plan.

Re-visit your process

5. Show your deep understanding of the client.

You have a relationship with your client unlike any other. Create a customized version of the Client Storyboard, shown below, including key information for each category from your client notes. Ask the client if anything has changed since you last met.

The Client Storyboard is designed to highlight the depth of the client/advisor relationship and demonstrate your knowledge of the client’s holistic life picture.

Client storyboard for the Janssen family

6. Provide a visual of what you’ve done.

Clients often forget what you’ve achieved together over the course of your relationship. Create a customized progress report like the one shown below to illustrate the services and value you’ve provided over the years. Talk your clients through this summary and highlight the benefits of your advice.


7. Review investment costs.

Whether you’re operating a fee-based or a commission-based practice, it’s in the best interests of both you and your client to review investment costs regularly (e.g., when new investments are being made and during regular review meetings). Here are some best practices from top industry professionals:

1. Keep it succinct. Spend some time to craft an easy-to-digest message around fees. This is not a time to use industry jargon and acronyms (such as MER, DSC, etc.). While you’ll have to explain the concepts, focus on what your clients really want to know about costs and use plain language.

2. Be confident. Use dollars and cents, not percentages. Investors want to know exactly what they’re paying and it’s best they hear it from you rather than one of your competitors. Here’s an example script: “The fees for your portfolio are approximately $_____ per year. The services you receive for these fees include______.” Point c, below, gets into those services.

3. Let them know what they’re getting for those fees. Remember, investment costs are only an issue in the absence of value. Ensure you explain the support clients are receiving from each service provider. Here are some examples:

  • Investment company: Professional portfolio management, client services and administrative support. The investment company also pays the GST and HST on the fund.
  • Advisor dealership: Compliance and oversight, access to wealth management experts, statements and reports.
  • Advisor and team: Wealth management, coaching, advice and ongoing monitoring, tax minimization.

8. Review your services.

An advisor recently told a story of a client she’d worked with for over 15 years. At the client’s review meeting, he mentioned he’d just arranged new disability coverage from his bank. The advisor was surprised, as she was certain her client knew that she provided a variety of insurance options. He’d forgotten. The advisor blamed herself for not reviewing her full range of offerings regularly with the client. The lesson here? It’s never a bad idea to reiterate the depth and breadth of services you offer. Find time during your regular client review meeting to position your value by using stories of real client situations and how you helped them. Think of ways to expand the services you are currently providing to the client.

Example: “Now you understand the costs of our services, it’s also important you’re aware of the full range of services we provide. I was recently working with a client similar to you and thought perhaps you may also find__________worthwhile.”

9. Discuss client matters.

Show your clients that your services and advice extend well beyond their financial lives. Set aside time during your meeting to discuss any topics of importance to them and remember these do not necessarily have to be related to finances, such as:

  • caring for aging parents;
  • selecting a university for teenage children; and
  • taking on a business partner.

10. Create a meeting action plan.

Summarize the important issues discussed during your meeting and the action items established between you and your client. After your meeting, prepare a summary and action plan to send to your clients within a week. Remind them you are happy to review their investments costs at any time.

Never underestimate the importance of open, transparent conversations with your clients. Investors need a clear understanding of the fees they are paying and what they’re getting in return. Be confident about the positive impact you have on your clients’ lives and remember that the fee and value conversation should be ongoing. Revisit costs and value regularly to strengthen your relationships and cement client loyalty.

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It is great learning, very useful for new advisers and a refreshing for seasoned one’s.

Friday, Dec 15, 2017 at 9:08 am Reply

Norm Wolverton

Good information and direction!

Thursday, Dec 14, 2017 at 12:08 pm Reply

Suzette Clerigo

Thanks,it’s really informative and helpful in the business.

Saturday, Nov 11, 2017 at 1:56 pm Reply

Kent Cronin

Some good ideas.

Saturday, Nov 4, 2017 at 9:26 pm Reply